Improvements proposed to the prudential requirements, supervision and crisis management mechanisms of financial institutions to avoid future crises in the perspective of the upcoming G20 meeting:
Senior supervisory figures suggested that it is time for the financial sector to show that it is part of the solution, not part of the problem. That includes paying for the cost of the crisis but also putting in place the mechanisms needed to avoid future ones. Profound reform of the financial system, including the new Basel III agreement, should indeed substantially improve the ability of banks to respond to crisis.
Speakers highlighted the huge range of challenges that the financial sector faces in the wake of the financial crisis. However, they were grouped under four main themes that remain relevant to the ongoing reforms of financial regulation and supervision at EU and global level:
· The reform of prudential requirements following the recent Basel agreement and how they will be implemented;
· The improvements that can be expected from the creation of the new EU regulatory and supervisory authorities and the conditions necessary for their success;
· The importance for financial stability and growth of removing the disincentives to long term investment;
· Developing a EU cross-border crisis management framework.
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