Bank of England's Carney says financial rules cannot be fixed, must be effective
WASHINGTON, April 20 Bank of England Governor Mark Carney told bankers on Thursday that financial regulations devised after the 2008-09 crisis cannot be set in stone, and must be flexible enough to deal with unintended consequences and unexpected gaps.
Speaking in Washington, where U.S. President Donald Trump plans to pare back banking rules he says hamper growth, Carney championed a "dynamic" approach to regulation that was flexible but ensured the global financial system remained resilient.
"Implementation must not only be effective, it must also be dynamic," he told a conference hosted by the Institute of International Finance, a gathering dominated by major banks.
"Authorities must learn by doing and make adjustments, as necessary, to optimise our efforts, without compromising on the level of resilience the reforms are intended to achieve," he said.
Carney said that the Financial Stability Board - a grouping of central banks chaired by Carney - was working on a review of regulation since the financial crisis.
"Specifically, it will assess whether G20 reforms are achieving their intended outcomes, identify any regulatory gaps or emerging risks, and flag any potential material unintended consequences," he said.
Britain's central bank chief was more guarded about national attempts to review rules, though he did not mention any by name.
"These are to be welcomed, provided the overall level of resilience is maintained," he added.
Carney also drew on language first used in a speech at Thomson Reuters in London earlier this month, saying the global financial system was coming to a fork in the road, and that Britain's departure from the European Union would be a litmus test for regulators. (Writing by David Milliken, editing by Andy Bruce)