Speaking at the Institute for Chartered Accountants in England and Wales (ICAEW) in London, Commissioner McCreevy reiterated that he does not plan any regulation on Sovereign Wealth Funds. “We must not allow the discussion on SWFs to be used as an excuse to raise unjustified barriers to investment and the free movement of capital”, he said.
McCreevy also denied any 'knee-jerk' reaction to the recent financial turmoil. “A measured, considered response is called for”, he said. “Medium to long term objectives need to be presented which are designed to deal with any identified shortcomings.”
These need to be addressed at the G10 level, in particular with the Basel Committee. “This is especially the case for the review of the securitisation framework, valuation standards for illiquid assets, and liquidity risk management”, he said.
On the European supervisory issue he said that the regulatory framework is still based on a national system “that frankly is out of date.”
The Commissioner envisages a college of supervisors for each cross border banking group to tackle these issues. “We have effective crisis prevention measures in the EU. Our crisis management arrangements need to match them”, McCreevy added.
Full speech
© Graham Bishop
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