I found myself sceptically smiling when reading that the Financial Stability
Forum is going to make the banking world safer by:
- Strengthening prudential oversight of capital, liquidity and risk
- Enhancing transparency and valuation;
- Changing the role and uses of credit ratings;
- Strengthening the authorities’ responsiveness to risks; and
- Ensuring there are robust arrangements for dealing with stress in the
You can read the full report of what they proposed to G7 ministers here.
Why was I smiling sceptically?
Because regulators do not make the markets safer. If anything, regulators make financial markets less safe.