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Can regulators really make markets more stable?

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
    financial system.

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.

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About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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