Ingves: Necessary reforms for a more stable financial sector
“We need the Basel reforms to ensure that banks around the world are properly equipped to manage crises and to reduce the risk of experiencing new global financial crises in the future.” This comment was made by Governor Stefan Ingves, speaking at the Swedish Bankers’ Association bank meeting on Thursday. He described the remaining reforms that the Basel Committee is now working on and explained why it is important that they are implemented.
The global capital regulations are being made more reliable and easier to compare between banks
Mr Ingves pointed out that the reform work aims to make the global capital regulations more credible and comparable between banks around the world. The work includes, for instance, reviewing and partly limiting the banks' possibilities to use their own models to calculate their capital requirements and also deciding on the formulation and calibration of the future leverage ratio requirement.
Mr Ingves also commented on the current criticism that the Basel Committee's current reform work aims to substantially increase the total global capital requirements. "The reform work concerns ensuring that all banks around the world have adequate resilience to manage financial crises and that risks are covered by capital in a uniform way in all banks and all countries," said Mr Ingves.
Almost 10 years on from the crisis – time to complete reforms
The Basel Committee is now working intensively on preparing the reforms before the end of the year. It is therefore important that those affected by the reforms understand how the global capital regulations will work.
