Global banking watchdog will pause for thought before introducing more regulations

Oliver Gill
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Mark Carney Delivers A Speech On The Globalisation Of Financial Services
Bank of England governor Mark Carney has warned about "regulatory fatigue" (Source: Getty)

Global banking regulators will pause for two years and take stock of their post-crisis reforms, allowing the sector a chance to catch its breath before any new initiatives are pursued.

The Basel Committee on Banking Supervision (BCBS) this evening outlined its strategic priorities for 2017-18. They fell into sections: finalising existing plans and "assessing whether any additional measures are warranted" at all.

Read more: Basel III reforms put on ice as key meeting postponed

Regulators said they would place a "greater focus on supervision" alongside the continued monitoring of "emerging cyclical and structural risks".

Some central bankers and financial watchdogs have questioned the need for further tinkering with global banking standards.

Bank of England governor Mark Carney has warned of "regulatory fatigue". In March he suggested the Basel Committee's sister organisation that he chairs, the Financial Stability Board, could increase its focus on the impact of reforms already in place.

And just over a year ago, then-Financial Conduct Authority boss Tracey McDermott told a City audience: "I do not think I will get much argument in this room when I say that the intensity and volume of regulatory activity over recent years is not sustainable – for regulators or for the industry."

Read more: Banking reforms on track but work to do says BIS

In Tuesday's statement, the BCBS said: "The committee will also continue its work to assess the impact of its post-crisis reforms.

"This will include assessing the effectiveness of the committee's post-crisis reforms in reducing excessive variability of banks' risk-weighted assets, in addition to a more general assessment of the extent to which the committee's post-crisis reforms have achieved their intended objectives."

In recent months, global banking watchdogs have struggled to iron-out the final details of framework elements such as banking capital rules.

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