- Title: Bank sector regulation should not be rolled back -Draghi
- Date: 18th November 2016
- Summary: FRANKFURT, GERMANY (NOVEMBER 18, 2016) (REUTERS) ***WARNING CONTAINS FLASH PHOTOGRAPHY*** EUROPEAN BANKING CONGRESS EUROPEAN CENTRAL BANK (ECB) PRESIDENT, MARIO DRAGHI, TALKING TO DEUTSCHE BANK CHIEF EXECUTIVE, JOHN CRYAN MEDIA DRAGHI TALKING TO CRYAN AND COMMERZBANK CEO MARTIN ZIELKE MEDIA FILMING CONGRESS VARIOUS OF CRYAN AND DRAGHI SITTING AND TALKING CONGRESS CRYAN AND DRAGHI CAMERAS VARIOUS OF DRAGHI AT PODIUM AUDIENCE (SOUNDBITE) (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "Going forward our assessment will depend on whether we see a sustained adjustment in the path of inflation towards this objective. And that means that inflation convergence towards 2 percent is durable, even with a reduction in monetary accommodation. Inflation dynamics, in other words, need to be self-sustained." AUDIENCE (SOUNDBITE) (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "So now it is the time to finalize the regulatory agenda and enter a period of stability. The focus should be on implementation, not on new design. Regulatory measures should be implemented in a balanced way that ensures a level playing field globally. And while marginal adjustments are possible, there should be no rolling back on what's been decided." DRAGHI LEAVING STAGE
- Embargoed: 3rd December 2016 10:19
- Keywords: Draghi Schaeuble ECB European Banking Congress banking regulation
- Location: FRANKFURT, GERMANY
- City: FRANKFURT, GERMANY
- Country: Germany
- Topics: European Union,Government/Politics
- Reuters ID: LVA00158Z13RB
- Aspect Ratio: 16:9
- Story Text: The global banking sector needs to be well regulated and measures already decided should not be rolled back, European Central Bank President (ECB) Mario Draghi said on Friday (November 18) as concerns grow that the new U.S. administration would ease bank rules.
"Bank regulation needs to enter a period of stability and there is no need to redesign the rules," Draghi told a conference, arguing that excessive deregulation was the chief cause of the global financial crisis.
"Going forward our assessment will depend on whether we see a sustained adjustment in the path of inflation towards this objective. And that means that inflation convergence towards two percent is durable, even with a reduction in monetary accommodation. Inflation dynamics, in other words, need to be self-sustained," Draghi told the European Banking Congress conference in Frankfurt.
Donald Trump's presidential election win has increased hopes by some and concerns by others that many of the bank sector rules rolled out in the past decade would be scrapped, giving banks more breathing space but potentially increasing systemic risks.
"The focus should be on implementation, not on new design," Draghi said. "Regulatory measures should be implemented in a balanced way that ensures a level playing field globally."
Re-regulation has led to improved bank solvency and asset quality, also helping Europe start is drive to reduce non-performing loan levels.
A new wave of bank rules known as Basel III is due to be finalised in January and come into force in 2019 after years of hard fought negotiations.
Having unveiled unprecedented stimulus over the past several years, Draghi said his policy focus is now on whether a recovery in euro zone inflation can sustain itself even if the ECB's exceptional monetary stimulus is reduced.
Inflation is expected to rise over 1 percent early next year after flirting with deflation for year. But that is still well short of the ECB's close to 2 percent target. - Copyright Holder: REUTERS
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