Speech by Adair Turner, FSA Chairman
Cass Business School
Between 2007 and 2009 the global financial system suffered a huge crisis, with major harmful macroeconomic effects. In response, a major programme of regulatory reform has been launched and is part complete.
- Last year we agreed a major reform of bank capital and liquidity standards – Basel III.
- This year the Financial Stability Board will decide measures to address problems created by systemically important financial institutions (SIFIs) – by banks seen in the past as ‘too big to fail’.
These changes will make a major difference...
Read the full speech [PDF]
Speech slides [PDF]
1 comment:
Couldn't find the Adair Turner speech: possibly because his "Financial Services Authority" has been merged with the "Prudential Regulation Authority".
Anyway, strikes me maturity transformation is complete nonsense. Reason is that while it does create liquidity / money, it does so at the expense of risking bank failures and disasters like the 2007 bank crisis, as others have pointed out. Ergo all government support of maturity transforming banks (e.g. via deposit insurance and bank bail outs) should cease, particularly as CENTRAL BANKS can create whatever amount of money is needed to keep unemployment to a minimum and that involves none of the above risk. For more on that, see:
https://mpra.ub.uni-muenchen.de/108488/
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