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Effective change to reverse the economic downturn will only come if G20 leaders return home with a clear list of actions, the British Bankers’ Association said today.
Speaking ahead of tomorrow’s G20 meeting in London, BBA chief executive Angela Knight said the UK’s recent review of financial regulation could serve as a template for how banks could work with governments, regulators and central banks to reform the banking system.
Angela Knight highlighted the industry’s wish-list for the G20. The three key actions are:- Reform: a strong and unqualified endorsement by G20 leaders next week of plans to reform international financial institutions and standard-setters (such as the Basel Committee and the Financial Stability Forum), along with a commitment to continue to finance essential cross-border institutions such as the International Monetary Fund;
- Restore: a realistic appraisal of what needs fixing first. We need to focus initially on restoring the world’s credit markets, then look at the economic evidence for global reform on issues such as hedge fund regulation, offshore financial centres and executive pay;
- Free trade: a renewed commitment to embrace free trade and not to retreat into economic nationalism. History has proven time and time again that the world economy can best heal itself when we retain faith in free trade. Putting in place measures to maintain jobs here makes no sense if no one buys the goods or services we have on offer.
Angela Knight said: “Globalisation brings benefits but it has costs associated with it as well. The UK, as the largest international financial centre, has been more exposed to the global financial crisis than many. But most of the UK’s banking industry is managing effectively in this difficult time.
“As we review our own regulation two things must happen. The first is that changes need to take place not just in the UK but all across the EU and internationally as well. Second, whatever we do on regulation locally and however we do it, the UK must ensure it still provides an attractive, competitive, international market place, sensitive to the requirements of the many and various entities that operate within it. Failing to do either of those things will be prejudicial to this international centre and will slow up the recovery of the economy.”
