BERLIN (MNI) – The new Basel III banking regulation will make the
financial system more stable and won’t significantly hurt the economy,
ECB Governing Council member Axel Weber said in a draft for a speech to
be delivered on Thursday at a conference in Frankfurt.
“All in all, the new rules will, without any doubt, make the
financial system more stable,” the Bundesbank president said. “Several
studies show … that from the new rules no grave impact should emanate
for the economy,” he remarked. Fears of severe economic consequences
from the new banking regulation seem overblown, he reckoned.
“Still, even if the stability of banks will be increased by the new
rules, it is neither possible nor desirable to completely rule out the
failure of individual banks,” the Governing Council member insisted.
Orderly insolvencies are a core element of a market-based system, he
stressed.
Basel III will not only change the profile of banks but also the
quality and size of the banking business as well as the total number of
banks, he predicted.
Weber once again demanded international rules to allow an orderly
insolvency of systemically relevant banks. He renewed his call for more
transparency and regulation of the shadow banking sector.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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