Britain: Supranational Banking Organization May Be Needed
October 16th, 2009Funny how BIS isn’t mentioned.
Via: Reuters:
A global body with legal powers may be needed over time to enforce the world’s new financial rules, the Financial Services Authority (FSA) said on Wednesday.
The FSA’s newly appointed and first director of international affairs, Verena Ross, said the Financial Stability Board (FSB) was key to ensuring all gaps in regulation between securities, insurance and banking sectors were plugged.
Formerly known as the Financial Stability Forum, the FSB was expanded in April to include central bankers and finance ministry and regulatory officials from all Group of 20 (G20) countries.
The G20 has asked the body, chaired by Bank of Italy Governor Mario Draghi, to coordinate global efforts to introduce new financial rules in light of the sector’s worst crisis in 70 years.
“I would advocate to make sure the FSB have a strong secretariat to support their work,” Ross told a City and Financial Conference.
“The role of the FSB is crucial. We will need to make sure it is able to play its role forcefully… Success depends on real progress over the next six to 12 months,” she said.
But the board has no legal teeth and there are “real questions” about whether the world can continue with such informal arrangements in the longer term, Ross said.
There may be a case for exploring the need for a more formal global regulatory framework, such as a body with legal powers of enforcement like the World Trade Organisation, Ross added.
Maybe it has to with the fact, that the BIS – despite its seeming disconnect with reality – harbors a big number of economies and so every member nation gets updates what to do and how and can discuss at the same time. And, much more important, its semi-secret location in Switzerland could be the thorn in the side of the international financial circus.
The G20 want a regulating gremium similar to the security council with a absolute veto. Even the IMF is too much multilateral; they want to kick out nations like Switzerland right now.
Don’t they notice how BRIC will get more power, if this “supranational” thing will be ratified? Or do they and calculate with the cooperation of those two?