OCC: Focus on less coordinated regs
Thursday 17 November 2011 - by Karina Whalley
A US banking regulator head has warned global policymakers to focus their attention on areas of financial regulation that are less coordinated, particularly where the Basel Committee is absent.
Speaking at a special seminar on international finance, he said: "Financial policymakers should be giving serious thought to the consequences of significant differences in the direction taken in these less-coordinated elements of post-crisis financial reform."
Walsh acknowledged that the results of integrating varied, complex financial regulation globally are hard to predict.
Comparing regulation to a concoction of drugs, he said that mixing different regulation could lead to "dangerous interactions" where the benefit is less than the sum of the parts.
But Walsh is certain that differences in the way countries carry out financial reform will not drive out financial activity to new areas.
"Some suggest that uneven implementation of financial reform or more basic differences in regulatory policy might lead certain financial activity to migrate to new financial centres: from North America to Europe or on to Asia," he said.
"That would be unfortunate indeed if it was a response not to market forces and opportunities but to perceived differences in the intensity of supervision and regulation.
"Frankly, I don't expect this to happen."
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