Banks, regulators agree need for global response
By Krista Hughes and Martin Howell
DAVOS, Switzerland (Reuters) - Leading bankers seeking to quell a political backlash over their role in the financial crisis agreed with regulators on Saturday that new banking rules should be globally consistent.
A closed-door meeting of dozens of financial sector heavyweights on the sidelines of the World Economic Forum made some progress on bank capital and liquidity requirements, and legal structures, participants said.
But the bankers and regulators skirted the issue of a global insurance levy to make sure that banks -- not taxpayers -- pay for future mistakes, and no firm agreements were reached.
Larry Summers, top economic adviser to President Barack Obama, who is under fire from Wall Street over his plans to curb big banks, said the "vigorous, constructive discussion" had raised the level of understanding.
Financial Stability Board chief Mario Draghi said global regulators were working on proposals for a central agency to manage bank failures, and mulling ideas for capital surcharges or contingent capital for institutions deemed too big to fail.
"We want to have an authority or an agency which has the power, the funds, the budget and the competence to manage failure in an orderly way," he told Reuters Insider television.
But other participants were skeptical of any cross-border body that would impinge on national sovereignty.
Congressman Barney Frank, piloting tough legislation to regulate Wall Street, said after the talks: "No one got up and said don't regulate us. They would be wasting their time if they did. They all understand regulation is coming." Continued...