Global Regulators Agree on Rules to Prevent Financial Crises
“At the same time,” he said, “it’s impossible to know what’s in store for the future.”
The rules were hashed out by the Group of Central Bank Governors
and Heads of Supervision, which comprises representatives from 26 countries, including the United States, plus the European Union and Hong Kong.
Steven Mnuchin, the United States Treasury secretary, said in a statement Thursday
that the rules “will help level the playing field for U. S. firms and businesses operating internationally.”
One of the main lessons of the last financial crisis was
that many banks that appeared healthy on paper were acutely vulnerable to disruptions in the flow of money among financial institutions.
A group of global central bank governors and bank regulators, meeting in Frankfurt, signed off on the
last chapter of a banking rule book they began writing after the financial crisis began in 2008.
The rules will make the banking system more resilient, he added, but “nothing is crisis proof.”
The negotiators were unable, for example, to reach agreement on a way to address one of the root
causes of the government debt crisis that nearly destroyed the eurozone a few years ago.
“It makes a big difference for some European banks.” He said, for example,
that the rules would require European banks that specialized in mortgage lending to hold more capital.