GYEONGJU, South Korea (MNI) – International regulators are on the
finish line of overhauling financial market regulations, making the
implementation of new rules now a priority, European Central Bank
Governing Council member Axel Weber said on Saturday.
Regulators have made “substantial progress” on financial market
regulation, Weber said at a press conference following the G20 meeting.
“The catch phrase is Basel III,” he said.
The Basel III accord sets new, stricter capital standards for the
world’s banks.
“As regulators, we really are at the finish line — as regards
capital liquidity and new accounting rules,” Weber said.
Weber emphasised that it is now of utmost importance that national
authorities implement the new rules.
“The ball in now in the court of the law makers, the parliaments,
to implement this. Only if it is implemented will we really have a more
stable financial system,” Weber said.
Weber, who is also head of the German Bundesbank, said that
regulators have more work to do, in particular on systemically important
institutions and the shadow banking system.
New rules for systemically relevant banks will include introducing
higher loss absorbing capacities as well has mechanisms that will allow
an orderly unwinding of such an institution, Weber said.
Weber warned that the shadow banking system poses a danger in that
activities in the regulated sectors will merely migrate to the
unregulated sector, meaning that “nothing is won.”
“We need more transparency, we need data and we need better rules
for the sector,” Weber urged.
–Frankfurt bureau tel.: +49-69-720142. Email: jtreeck@marketnews.com
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