In his speech on “Institutional responses to the crisis and thoughts on regulatory issues”, Mr Weber emphasised that the current real challenge is making the financial system more stable without significantly hurting economic productivity.
Mr Weber made the following points concerning regulatory issues:
· it would be very unwise to believe that institutional reform - and the creation of new bodies at the European or global level - will by themselves prevent the reoccurrence of a similar crisis.
· making the financial system more stable is a manageable task. The real challenge is to make it more stable without significantly hurting economic productivity.
· creating level playing fields is another important demand when it comes to seriously improving regulation. It is, therefore, of the utmost importance to further promote the convergence of international and US accounting standards - unless we want to continue to compare apples and oranges. In this context, however, Mr Weber said that he appreciated that the IASB (International Accounting Standards Board) has recently agreed to refrain from broadening the fair value principle in the IFRS.
· strengthening banks’ capital base is certainly the most important, but also the most difficult, task on the regulatory reform agenda. Being involved in the processes of the Basel Committee and the FSB, the Bundesbank appreciates the G20’s decision to improve the quality and quantity of banks’ capital once the financial system has stabilised on a sustainable basis and the economy has recovered. However, we should refrain from unsettling the markets with precise schedules. Getting it right is important.
He concluded by saying that ‘financial stability’ is not just a buzzword, as some critics suggested a few years ago. The financial crisis has proved them wrong. Policymakers have shown their commitment to take decisive steps in order to make the financial system more stable. Now it is up to the central banks and the other players in macro-prudential supervision to enhance the analytical instruments needed to recognise risks to financial stability earlier and more accurately.
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