Ingves: Towards a more stable banking system
On Friday morning Governor Stefan Ingves takes part in the finance panel organised by the Swedish Centre for Business and Policy Studies and SIFS to talk about the new Basel III framework and the challenges faced by the Basel Committee. The regulatory framework aims to ensure that the banking system in Sweden and abroad can prevent and manage risks in a better way, while still fulfilling its essential functions.
As Chairman of the Basel Committee, Mr Ingves is leading the work on formulating the new global regulatory framework for the banks (Basel III).
More than seven years have passed since the financial crisis broke out. It is time to summarise what has been done and look ahead to the challenges awaiting us. "The Basel Committee will in the future be putting increasing emphasis on following up and evaluating the observance of the regulations. But there is also more to be done to reinforce them", states Mr Ingves. According to him, one of the major challenges in the coming period is to ensure a comparable and credible application of the regulations around the world; this is necessary for them to have the intended effect.
According to Mr Ingves, there are specific circumstances in Sweden, special structural vulnerabilities that more than justify setting stricter requirements for the Swedish banks than the minimum in the Basel III framework. These are related to the interconnectedness of the banks and their great dependence on wholesale funding. And although the major banks now have high capital ratios, they have relatively little capital in relation to their total assets.
Follow the link to see the slides shown by Mr Ingves during his presentation to the finance panel.
