Leading bankers warn that new rules will hit recovery
Monday 11 October 2010
"Too tough" banking regulation will put a "drag on economic recovery" and cost upwards of 10 million jobs globally, the world's leading bankers have warned.
The Institute of International Finance(IIF) yesterday launched a determined backlash against national governments who want to "gold-plate" the new Basel III regulations with "arbitrary constraints". The Washington-based body warned against unilateral actions to impose on banks fresh levies or even tougher capital requirements, or to bring forward the implementation of Basel III, which is not scheduled to be fully in force until 2019.
Such moves, it said, will add to the cost of raising capital in the financial system, which will in turn meanhigher costs for households and businesses, less corporate lending, and less credit for international trade.
The IIF represents 420 of the largest financial institutions in the world.
Deutsche Bank chief executive and IIF chairman Josef Ackermann said an "overreaction" by national regulators would jeopardise lending to the real economy: "There can be no doubt that reforms will produce a drag on economic recovery, and this means that jobs that should be created and that need to be created may not be created," he said.
Peter Sands, chief executive of Standard Chartered, added that "the impact on the real economy could conceivably be as large or greater than our original assessment" of a loss of about 10 million jobs. "The stakes are hard to exaggerate," he said.
The IIF's move comes at a time when concern about a "jobless recovery" is intensifying. Some 30 million jobs globally have been destroyed in the recession. The bankers are also signalling resistance to moves to break up the biggest banks. Mr Ackermann stated that "the focus shouldn't be on penalising firms just because they are big". He said that all they wanted was a "level playing field", based on Basel III.
However, new regulatory reform proposals continue to be generated. Also in Washington, another organisation, the Group of 30, chaired by Paul Volcker and including the Governor of the Bank of England, Mervyn King, wants governments to speed up the introduction of "macro-prudential" polices.
The aim is to prevent a repeat of the exponential and unsustainable growth in derivatives seen in the boom decade that led up to the credit crunch.
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 3 Number of young homeless people in Britain is 'more than three times the official figures'
- 4 Motorists taunt suicidal woman on bridge and tell her to 'get on with it'
- 5 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Number of young homeless people in Britain is 'more than three times the official figures'
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...