Saturday, November 27, 2010

World turns to UK's Independent Banking Commission for financial regulation - Telegraph

The failure of the G20 to agree on detailed rules for dealing with “too big to fail” banks is expected to put the spotlight on the UK’s Independent Banking Commission, which will now be free to come up with its own recommendations on how to deal with the risk posed by large global financial institutions.

Sir John Vickers, chairman of the Independent Banking Commission, has already met with top US policy makers Photo: Eddie Mulholland

Worldwide attention could focus on the commission’s options paper, due to be published in the spring. Its publication will coincide with the next round of talks on revisions to the Basel III rules on bank capital that are expected to bring in extra charges for banks considered “systemically important”.
One source said: “No one out there is doing anything like the work the commission is currently undertaking and there is a lot of interest in what they will be saying, particularly as they will have a credible body of facts, figures and evidence behind anything that they say.”
How to regulate banks with global operations is considered one of the most important items on the agenda for the overhaul of the international financial system, as politicians, central bankers and regulators attempt to make the banking industry safer.

The IBC report is likely to include detailed suggestions on what additional capital charges big banks should be hit with as well as ideas on how to ensure that the failure of one of these institutions does not risk the entire financial system.
Sir John Vickers, chairman of the commission, has already met with top US policy makers, including former Federal Reserve chairman, Paul Volcker, architect of the eponymous Volcker Rule.
Sir John has also met with the European Union’s senior regulators, and more trips are planned, with other commissioners set to visit Australia, Canada, China, as well as France and Germany.
The UK has been at the forefront of moves to update financial regulation and was the first major country to introduce a bank levy, while Britain’s rules on financial sector compensation are already tougher than in many other jurisdictions.
This has raised alarm within the banking industry and wider financial sector with compliants that Britain risks damaging the sector by moving out of step with international peers.

by Harry Wilson The Telegraph November 28, 2010

World turns to UK's Independent Banking Commission for financial regulation - Telegraph

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