Old habits die hard
(19 November 2009 – Europe) Jean-Pierre Roth, Switzerland’s central bank chief is concerned that ‘old reflexes’ are returning to the financial world.
Mr Roth, who is a member of the Financial Stability Board, has voiced his concerns that the international community must continue to put in place regulations.
Mr Roth told journalists that all the old reflexes are coming back, referring to the appetite for risk and short-term credit or profit on the financial markets.
The G20 group of international leaders are looking to regulate requirements for the banking system.
Mr Roth said that he thinks it is ‘absolutely needed’ to continue down the regulatory path if the economy does not want to be confronted eventually with even worse problems.
Before the crisis, banks did not know how their states were going to behave in the event of a ‘crisis’, Mr Roth explained.
Now, after the crisis, all the major bank heads know that in the case of another crisis in the future that the banks can rely on government backing, and that is the parameter that has changed fundamentally, Mr Roth added.
Countries overstimulated their capacity to evaluate and manage risk, Mr Roth said.
The conclusion is very simple, everyone has to be more cautious and acknowledge that they don't master everything, Mr Roth explained.
A reinforcement of the IMF, including by giving emerging or developing nations greater place at the expense of European nations, was likely and necessary, the Swiss central banker suggested.
Mr Roth told journalists that all the old reflexes are coming back, referring to the appetite for risk and short-term credit or profit on the financial markets.
The G20 group of international leaders are looking to regulate requirements for the banking system.
Mr Roth said that he thinks it is ‘absolutely needed’ to continue down the regulatory path if the economy does not want to be confronted eventually with even worse problems.
Before the crisis, banks did not know how their states were going to behave in the event of a ‘crisis’, Mr Roth explained.
Now, after the crisis, all the major bank heads know that in the case of another crisis in the future that the banks can rely on government backing, and that is the parameter that has changed fundamentally, Mr Roth added.
Countries overstimulated their capacity to evaluate and manage risk, Mr Roth said.
The conclusion is very simple, everyone has to be more cautious and acknowledge that they don't master everything, Mr Roth explained.
A reinforcement of the IMF, including by giving emerging or developing nations greater place at the expense of European nations, was likely and necessary, the Swiss central banker suggested.
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