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Carney urges G20 to push on with banking reforms amid ‘fatigue’ fears

by: Alice Rigby
  • 10/02/2015
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Carney urges G20  to push on with banking reforms amid ‘fatigue’ fears
Mark Carney has urged G20 members to continue a "big push" for banking reforms, after suggesting that legislators maybe tiring of financial regulation.

Carney, governor of the Bank of England and chair of the Financial Stability board (FSB), said that political criticism was arising as countries moved from a focus on stability to growth.

At an Institute of International Finance meeting this week Carney said: “I worry about reform fatigue, not surprisingly, both at the FSB and more generally.”

The FSB draws together central bankers and finance ministries from around the G20 and is meeting during a broader G20 summit in Istanbul to discuss further regulation of the finance markets.

The measures already implemented by the FSB have been criticised by the banking industry, criticism that is starting to garner attention in some countries.

But Carney added that much of the board’s reforms would pay off in the longer term.

“Many of the toughest reforms are micro-reforms that can have big political coalitions against them and have payoff very far into the future.”

At November’s meeting, the board agreed to force banks to hold bonds as a defence against economic volatility, preventing governments from having to bail out banks as many did in 2009.

However, banks have argued that the rule would make lending and trading too expensive.

Carney said that there was “no room for complacency”.

He added this would be the final significant measure of the board for some time: “This is the year of implementation… We want to have a big push on this.”

 

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