DAVOS-Highlights from Redesigning Financial Regulation panel

DAVOS, Switzerland, Jan 30 (BestGrowthStock) – Following are
highlights from the Redesigning Financial Regulation panel at
the World Economic Forum in the Swiss resort of Davos on
Saturday.

JEAN-CLAUDE TRICHET, PRESIDENT, EUROPEAN CENTRAL BANK
“We’re bound to improve considerably regulation. We’re bound
to make the financial system much more resilient than before
because we cannot afford to have a financial system as fragile
as before.

“The fact that we must have global rules is absolutely
essential.

“If failures appear avoidable, we need living wills or
resolution then we have enormous work to do as regards to cross
border institutions. We have to strengthen infrastructure in
order to minimise the fallout of a collapse. It is very complex
and multi-dimensional and we have to work a lot.”

“The case of Europe is particular one — we have a single
market, the European Union, and national supervision. A large
set of reforms is underway in Europe which would permit to have
much better coordination among supervisors than existed before.
It’s the first lesson drawn from the crisis on an institutional
level.”

PRAVIN GORDHAN, FINANCE MINISTER, SOUTH AFRICA

“The question for me is whether constituencies that are
large banks have sufficiently reflected upon their business
models, mindsets in order to … proactively lead their
businesses to new business models. Are we hoping after the
crisis, we can go back to the old normal?”

“Regulation for what? Regulation is to repair the past and
marginally improve the past, and we don’t think we’re doing
ourselves much good. All banks are not the same. In formulating
new regulations, in may developing countries it wasn’t a
financial system crisis. Ordinary people faced the impact of
failures of financial system.”

AGUSTIN CARSTENS, GOVERNOR, CENTRAL BANK OF MEXICO

“Capital requirement is related to risk taking. We have not
been successful in clearly associating capital requirement with
risks undertaken by financial institutions.”

ISRAEL C.BANK GOVERNOR STANLEY FISCHER

“On the issue of size we have an undoubted conclusion the
bigger they are more difficult to deal with. One can imagine
firm limits on their size, I tend to prefer differential in
capital ratios. Too big to fail is not the right issue. We’re
looking for a resolution mechanism.”

“There’s a clear desire for uniformity of regulation across
borders, it cannot be identical as each market is different but
certainly uniformity of approach.”

“(The FSB) has done a great deal of excellent analytical
work produced many recommendations that are important. Now we
see these put into practice. There’s a delicate balance between
getting coordination and getting measures put in place.”

“It’s clear in the U.S. some of the problems originated in
areas which had no supervisory at all. In terms of … whether
the structure of supervisory system in the U.S. is being
improved and modernised, it seems to me in the U.S. case more
rapid progress is desirable to close all the gaps that exist in
the current system.”

TIDJANE THIAM, CEO, PRUDENTIAL

“My company is active in the UK and the US and 30 different
countries. What we want is consistency. … We don’t want to be
exposed to regulatory arbitrage.”

“Regulatory arbitrage is very damaging for us.”
“It’s important that companies are allowed to fail. We think
good companies should be able to push out bad companies.”

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DAVOS-Highlights from Redesigning Financial Regulation panel