Central Bankers to Gather With Private Banks at BIS (Update1)
January 06, 2010, 10:54 PM EST
By Masahiro Hidaka and Shamim Adam
Jan. 7 (Bloomberg) -- Central bankers plan to hold a session with representatives of financial firms to discuss regulation at a Bank for International Settlements meeting this weekend, according to two Group of Seven central bank officials.
The BIS meetings, held in Basel, Switzerland, occasionally feature sessions with private banks and this month’s gathering will be such an example, the officials said on condition of anonymity because the agenda isn’t public. One of them said chief executive officers usually attend the January gatherings.
Leaders from the Group of 20 emerging and developed nations pledged in September to develop rules by the end of 2010 to require banks to hold more and better-quality capital and discourage leverage. Bank of Italy Governor Mario Draghi, who leads an international group of officials and regulators, is scheduled to produce a report on progress toward strengthening regulations before the next G-20 summit.
“The central bankers are clearly aiming to head off the excesses that will certainly come out of the very easy monetary policy” put in place during the crisis, said Bill Belchere, global chief economist at Mirae Asset Securities in Hong Kong. “They have no choice but to be prudent and vigilant to grapple with the potential problems and stop bubbles before they emerge.”
Central Bank Rates
The Federal Reserve has cut its benchmark rate to almost zero and taken on more than $1 trillion of assets on its balance sheet to combat the credit freeze, while its Japanese counterpart’s benchmark is also near zero. The European Central Bank’s main rate is a record-low 1 percent.
The Financial Times reported earlier representatives of banks including BlackRock Inc., Citigroup Inc. and Wells Fargo & Co. will attend the session over the Jan. 9-10 weekend. Wells Fargo CEO John Stumpf isn’t planning to attend, said Janis Smith, a spokeswoman for the San Francisco-based bank.
The FT said that the BIS invitation cited concerns that financial companies are returning to risk-taking patterns that were in place before the global crisis began in 2007.
Draghi, who heads the Financial Stability Board, has warned that banks may seek to block regulatory overhauls as the global economy recovers from the deepest postwar recession.
‘Vested Interests’
“As the situation improves, the power of vested interests contrary to any substantive reform get stronger,” Draghi said in a Nov. 12 speech in Rome. A “critical stage” in overhauling regulation and oversight of financial markets is beginning and authorities need “to take bold and radical action to remedy the current deficiencies,” he said.
The Financial Stability Board is made up of national central-bank representatives, finance ministries, supervisory authorities and standard-setting bodies.
U.S. President Barack Obama has also expressed frustration that financial firms that got government bailouts are continuing to take large bonuses and fighting his effort to revamp bank regulations.
“I did not run for office to be helping out a bunch of, you know, fat-cat bankers on Wall Street,” Obama said in an interview with CBS’s “60 Minutes” broadcast Dec. 13.
Central bankers meet six times a year at the BIS, which calls itself the bank for central banks, holds currency reserves on behalf of its members and produces research.
January 06, 2010, 10:54 PM EST
By Masahiro Hidaka and Shamim Adam
Jan. 7 (Bloomberg) -- Central bankers plan to hold a session with representatives of financial firms to discuss regulation at a Bank for International Settlements meeting this weekend, according to two Group of Seven central bank officials.
The BIS meetings, held in Basel, Switzerland, occasionally feature sessions with private banks and this month’s gathering will be such an example, the officials said on condition of anonymity because the agenda isn’t public. One of them said chief executive officers usually attend the January gatherings.
Leaders from the Group of 20 emerging and developed nations pledged in September to develop rules by the end of 2010 to require banks to hold more and better-quality capital and discourage leverage. Bank of Italy Governor Mario Draghi, who leads an international group of officials and regulators, is scheduled to produce a report on progress toward strengthening regulations before the next G-20 summit.
“The central bankers are clearly aiming to head off the excesses that will certainly come out of the very easy monetary policy” put in place during the crisis, said Bill Belchere, global chief economist at Mirae Asset Securities in Hong Kong. “They have no choice but to be prudent and vigilant to grapple with the potential problems and stop bubbles before they emerge.”
Central Bank Rates
The Federal Reserve has cut its benchmark rate to almost zero and taken on more than $1 trillion of assets on its balance sheet to combat the credit freeze, while its Japanese counterpart’s benchmark is also near zero. The European Central Bank’s main rate is a record-low 1 percent.
The Financial Times reported earlier representatives of banks including BlackRock Inc., Citigroup Inc. and Wells Fargo & Co. will attend the session over the Jan. 9-10 weekend. Wells Fargo CEO John Stumpf isn’t planning to attend, said Janis Smith, a spokeswoman for the San Francisco-based bank.
The FT said that the BIS invitation cited concerns that financial companies are returning to risk-taking patterns that were in place before the global crisis began in 2007.
Draghi, who heads the Financial Stability Board, has warned that banks may seek to block regulatory overhauls as the global economy recovers from the deepest postwar recession.
‘Vested Interests’
“As the situation improves, the power of vested interests contrary to any substantive reform get stronger,” Draghi said in a Nov. 12 speech in Rome. A “critical stage” in overhauling regulation and oversight of financial markets is beginning and authorities need “to take bold and radical action to remedy the current deficiencies,” he said.
The Financial Stability Board is made up of national central-bank representatives, finance ministries, supervisory authorities and standard-setting bodies.
U.S. President Barack Obama has also expressed frustration that financial firms that got government bailouts are continuing to take large bonuses and fighting his effort to revamp bank regulations.
“I did not run for office to be helping out a bunch of, you know, fat-cat bankers on Wall Street,” Obama said in an interview with CBS’s “60 Minutes” broadcast Dec. 13.
Central bankers meet six times a year at the BIS, which calls itself the bank for central banks, holds currency reserves on behalf of its members and produces research.