Banks, regulators agree on reform
Source: Agencies |
January 31, 2010, Sunday
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Print Edition
Print Edition
LEADING bankers seeking to quell a political backlash over their role in the financial crisis agreed with regulators yesterday that new banking rules should be globally consistent.
A closed-door meeting of dozens of financial sector heavyweights on the sidelines of the World Economic Forum in Davos, Switzerland, made some progress on bank capital requirements, liquidity and legal structures, participants said.
But the bankers and regulators skirted the issue of a global insurance levy to make sure that banks, not taxpayers, pay for future mistakes, and no agreements were reached.
Larry Summers, economic adviser to US President Barack Obama, who is under fire from Wall Street over his plans to curb big banks, said the "vigorous, constructive discussion" had raised the level of understanding.
Financial Stability Board chief Mario Draghi said global regulators were working on proposals for a central agency to manage bank failures, and mulling ideas for capital surcharges or contingent capital for institutions deemed too big to fail.
"We want to have an authority or an agency which has the power, the funds, the budget and the competence to manage failure in an orderly way," Draghi said.
US Congressman Barney Frank, who is piloting legislation to regulate Wall Street, said after the talks: "No one got up and said don't regulate us. They would be wasting their time if they did. They all understand regulation is coming."
In a forum on the world economy, Summers and International Monetary Fund chief Dominique Strauss-Kahn said growth was returning faster than expected but better balance was needed between exporting and importing nations.
China's deputy central bank head, Zhu Min, said the country was working to achieve more balanced growth and boost domestic consumption.
A closed-door meeting of dozens of financial sector heavyweights on the sidelines of the World Economic Forum in Davos, Switzerland, made some progress on bank capital requirements, liquidity and legal structures, participants said.
But the bankers and regulators skirted the issue of a global insurance levy to make sure that banks, not taxpayers, pay for future mistakes, and no agreements were reached.
Larry Summers, economic adviser to US President Barack Obama, who is under fire from Wall Street over his plans to curb big banks, said the "vigorous, constructive discussion" had raised the level of understanding.
Financial Stability Board chief Mario Draghi said global regulators were working on proposals for a central agency to manage bank failures, and mulling ideas for capital surcharges or contingent capital for institutions deemed too big to fail.
"We want to have an authority or an agency which has the power, the funds, the budget and the competence to manage failure in an orderly way," Draghi said.
US Congressman Barney Frank, who is piloting legislation to regulate Wall Street, said after the talks: "No one got up and said don't regulate us. They would be wasting their time if they did. They all understand regulation is coming."
In a forum on the world economy, Summers and International Monetary Fund chief Dominique Strauss-Kahn said growth was returning faster than expected but better balance was needed between exporting and importing nations.
China's deputy central bank head, Zhu Min, said the country was working to achieve more balanced growth and boost domestic consumption.
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