At a gathering in Washington bankers have voiced their concern over new rules and regulations for the banking industry. There have been concerns that if regulators pursue a round of liquidity rules and capital regulations above those recently agreed upon internationally, they risk undermining the fragile economy.
Last month in Basel international regulators set minimum standards for international conduct, however central bankers have hinted at weekend meetings in Washington that Basel was just the beginning. Some of the financial world’s most powerful men have voiced their objections at the gatherings this weekend, claiming that countries who go beyond the limits set out in Basel will impede growth and deny a level playing field for banks and financial institutions.
Deutsche Bank AG’s CEO Josef Ackerman, who represents more than 400 financial companies, told attendees to the Washington meetings that “There are growing signs that global coordination is fizzling and unilateral actions are pending. Global banks will have to comply with the higher rules in every jurisdiction, regardless of their home base. That will steal from credit to companies and hurt job creation.”
The UK and Switzerland are also moving ahead with additional regulations on their banking sectors, after the tougher restrictions they were lobbying for in Basel were passed over for a softened version.
While the Basel rules were never expected to be applied 100 percent across the board in a uniform manner, the worry is that with countries going out on their own and adding more regulations, it will create too much divergence in the financial sector and may impede growth.
