IIF chairman calls for level playing field for finance

08:26, November 03, 2010      

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A leading banker expressed his hope here on Tuesday that the upcoming G-20 summit in Seoul would ensure that regulatory measures are consistent in order to promote a fair environment for finance.

"They (these measures) promote a level international playing field for finance," said Jose Ackermann, chairman of the Board of Directors of the Institute of International Finance (IIF), and chairman of the Management Board of Deutsche Bank AG.

"The G-20 and international regulatory authorities need to act in ways to build a consistent, international financial architecture," he said, noting that it is unfair for taxpayers and those have not received bailout, in contrast to big financial firms which were hit hard by the financial crisis but received government bailout.

Ackermann said the international community needs to have a cross-border resolution regime when addressing the issue of too big to fail.

In order to avoid the risks of regulatory arbitrage and fragmentation, regulators need to be committed to effective multilateral coordination, he added.

As for the Basel III aimed at tightening regulations for banks, the banker said that such a deal is demanding and challenging for banks. An analysis report released by the IIF months ago showed that, according to the Basel III, banks will raise capital sufficiency, and then they will reduce credit, thus hurting real economy, he added.

"It is also paramount that the summit leaders have a realistic appreciation of the cumulative economic costs of regulatory reform and that, accordingly, they reject additions to the capital requirements agreed in Basel in September and any shortening of the Basel timetable for implementing the new requirements," he said.

As for currency quarrel, he said that the currency issue is very complicated, no one should pursue the approach of blame but multilateral coordination.

On the same day, the IIF opened its Asia representative office in Beijing.

Source: Xinhua


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