By Johanna Treeck
WASHINGTON (MNI) – Global regulators should be able to ensure fair
play at a global level, the head of the Financial Stability Board Mario
Draghi said Friday.
Draghi said he is “confident” that we will see a level playing
field.
There are no reasons to think that Basel 3 rules, which will apply
the same capital and liquidity requirements to banks globally, will not
be endorsed by all parties involved, he asserted.
European observers have frequently warned that the U.S., which had
been slow in implementing Basel 2 rules, will not comply with new Basel
requirements putting European banks at a competitive disadvantage.
“We should not underestimate what we have accomplished The
financial world is a different world from what it was 2.5 year ago,”
Draghi said.
However, Draghi conceded that a lot more work lies ahead, citing in
particular the need to address the moral hazard problems associated with
institutions that are considered too big to fail and the shadow banking
system.
Draghi reiterated his firm call for effective resolution regimes
for systemically important institutions. In addressing these issues,
countries may pursue different strategies. “There are things that are
naturally different and they should be left different,” he said.
However, there should be “peer reviews that will challenges the
choices made within each jurisdiction and to ensure that measures taken
country by country … are mutually supportive,” Drag noted.
–email: jtreeck@marketnews.com
** Market News International Washington Bureau: 202-371-2121 **
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