Journalisted

Smaller banks will not make us safer

T wo years into the financial crisis, the longer-term repercussions for the global financial system are becoming more discernible. Progress is being made on the implementation of the Group of 20 action plan and we must not let up in our efforts. Industry as well as political leaders must ensure that arrangements found deficient, instruments found wanting and industry practices found inappropriate are not re-established. It is equally important that the cumulative effect of the various proposals is kept under consideration. For instance, a number of regulatory changes will lead to higher capital requirements, and care should be taken that the aggregate effect does not exceed levels deemed sufficient in the interest of an appropriate balance between stability and the ability of the financial system to raise the funds necessary for global growth.