SWITZERLAND: Bankers, regulators moot post-crisis rules at Davos.

Record ID: 741808

  • Title: SWITZERLAND: Bankers, regulators moot post-crisis rules at Davos.
  • Date: 31st January 2010
  • Summary: DAVOS, SWITZERLAND (JANUARY 30, 2010) (WORLD ECONOMIC FORUM POOL) WIDE OF PANEL DISCUSSION FRENCH FINANCE MINISTER CHRISTINE LAGARDE LISTENING IN SESSION PANELLISTS ON STAGE LARRY SUMMERS, ECONOMIC ADVISER TO U.S. PRESIDENT BARACK OBAMA, LISTENING MORE OF PANEL MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND, DOMINIQUE STRAUSS-KAHN ADDRESSING PANEL (SOUNDBITE) (English) MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND, DOMINIQUE STRAUSS-KAHN, SAYING: "We have to go ahead strongly in the financial sector reform, much more rapidly than has been done until now, and the political pressure cannot wait for supervisory conclaves and the traditional time it takes to make this kind of reform, but we have to do it in a very coordinated way." AUDIENCE, INCLUDING LATVIAN PRESIDENT VALDIS ZATLERS, LISTENING WIDE OF STAGE WIDE OF G20 NEWS CONFERENCE (SOUNDBITE) (English) CANADIAN FINANCE MINISTER JIM FLAHERTY, SAYING: "I'll be frank with you, there have been some precipitous actions by some countries that are inconsistent and this has concerned, of course, the private sector, or the private banking sector, as it well should, so we're looking forward I think in the G20 process, to try to develop the kind of consistency that our leaders directed us to develop when they met at Pittsburgh."
  • Embargoed: 15th February 2010 12:00
  • Keywords:
  • Location: Switzerland
  • Country: Switzerland
  • Topics: Finance
  • Reuters ID: LVA42JW96U936810P2Y7OS86EI91
  • Story Text: Bankers and regulators at the World Economic Forum in Davos agree that post-crisis bank regulation should be global.
    Leading bankers seeking to quell a political backlash over their role in the financial crisis agreed with regulators on Saturday (January 30) 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 made some progress on bank capital requirements, 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.
    In a public discussion on the world economy, International Monetary Fund chief Dominique Strauss-Kahn and Larry Summers, economic adviser to U.S. President Barack Obama, said growth was returning somewhat faster than expected but a better balance was needed between exporting and importing nations.
    Strauss-Kahn called for a speeding up of new rules on capital requirements for banks.
    "We have to go ahead strongly in the financial sector reform, much more rapidly than has been done until now, and the political pressure cannot wait for supervisory conclaves and the traditional time it takes to make this kind of reform, but we have to do it in a very coordinated way," he said.
    Bankers and policymakers said they held constructive talks on Saturday about how to reform the financial system and prevent future crises, drawing a line under weeks of recrimination and political uproar over reining in bank excesses.
    The annual forum in the Swiss mountain resort of Davos has reverberated with Obama's plans to curb the activities of major banks, particularly betting in financial markets with their own money, sparking a fierce debate on the necessary overhaul and the risks of excessive correction.
    Canadian Finance Minister, Jim Flaherty, said bankers he had met with held justifiable fears over new developments, and said reform should be coordinated through organisations such as the G20 rather than by individual countries.
    "I'll be frank with you, there have been some precipitous actions by some countries that are inconsistent and this has concerned, of course, the private sector, or the private banking sector, as it well should, so we're looking forward I think in the G20 process, to try to develop the kind of consistency that our leaders directed us to develop when they met at Pittsburgh," he said.
    It was a sentiment supported by Charles Dallara, managing director of the Institute of International Finance, which lobbies for banks.
    "There's already a lot happening in international coordination of regulatory reform, through the Group of 20, where President Obama himself hosted a summit in Pittsburgh only four months ago, three months ago, through the Financial Stability Board and through the Basel committee, and all of these fora are essential to find some common ground here. So, individual nation state proposals may have their role, particularly in a political world where unemployment is very high, but at the end of the day I think everyone recognises that there has to be a consensus about change across a number of countries and that can only be done through these global fora," he said.
    The head of the Financial Stability Board, Mario Draghi, said banks were getting the message that reform was coming, ready or not.
    "Well I'm getting the sense that the industry is understanding more about the systemic implications of their own behaviour, more recently than they used to do in the past. Whether this will translate into actual action, it has to be seen. I should say that a lot of progress has been made, both by the industry and by the regulators, but now much more, much more needs to be done, especially in the areas of capital regulation, liquidity and so on," he said.
    Saturday's talks follow behind-the-scenes discussions between leading European and U.S. banks at Davos, at which they failed to reach agreement on how to fight back against a global push for tougher financial regulation.
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