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World bankers urge against quick regulatory fix

Posted on: March 26, 2009


Reuters – Wednesday, March 25

* Focus on scope of overarching supervision of world finance

* Urged to avoid protectionist measures -bank spokesman

* 13 bank chiefs meet UK prime minister in 2-hour roundtable

* Regulation, accounting rules discussed before G20 meet

By Steve Slater and Catherine Bosley

LONDON, March 24 – Top executives from major U.S., Asian, European and African banks urged Britain’s prime minister on Tuesday not to push for short-term regulatory measures that could damage economic recovery.

Gordon Brown hosted a rare meeting of top world bankers ahead of a meeting of Group of 20 leaders in London on April 2-3 and discussed regulatory reform and the need to avoid protectionism, a spokesman for the banks said.

One of the major topics was reforming regulatory systems, including how watchdogs should develop their “macroprudential oversight for all systemically important financial institutions,” the spokesman said.

Macroprudential oversight is supervision of the entire financial system, as well as the individual participants in that system.

Banks also urged Brown and other G20 countries not to impose short-term actions that would “undermine economic recovery or the bigger goals of medium-term reform,” the spokesman said. A spokesman for Brown’s office said the two sides agreed on the need to reform regulatory systems across the globe and ensure “financial firms’ governance structures, risk management and compensation policies support financial stability”.

“There was clear agreement about the importance of supporting the global economy restoring lending by dealing head on with troubled assets and rejecting protectionism,” a Downing Street spokesman said.

Bankers at the meeting included Josef Ackermann, chief executive of Deutsche Bank <DBKGn.DE>, William Winters, co-head of investment banking at JPMorgan Chase <JPM.N> and Nobuo Kuroyanagi, president and chief executive of Japan’s Mitsubishi UFJ Financial Group <8306.T>.

The meeting was held against a backdrop of turmoil in financial markets that is expected to result in far-reaching regulatory change.

Alistair Darling, Britain’s finance minister, and Adair Turner, head of UK regulator the Financial Services Authority, also attended the meeting.

Other European executives attending the meeting included Alfredo Saenz, CEO of Santander <SAN.MC>, John Varley, CEO of Barclays <BARC.L>, Baudouin Prot, CEO of BNP Paribas <BNPP.PA>, Alessandro Profumo, CEO of UniCredit <CRDI.MI> and Peter Sands, CEO of Standard Chartered <STAN.L>.

They were joined by William Rhodes, vice chairman of Citi <C.N>, Richard Gnodde, co-CEO of Goldman Sachs International <GS.N> and David Duffy, CEO of South Africa’s Standard Bank International <SBKJ.J>.

 (Additonal reporting by Frank Prenesti; Editing by David Cowell)

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