FSA boss wants eurobonds and fiscal integration to stop crisis

Tim Wallace
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JOINT eurobonds and greater fiscal integration are both vital steps which Eurozone nations should take to end the current crisis and reduce some of the pressures which created the current panic, Financial Services Authority (FSA) chairman Adair Turner said today.

He also called for national regulators to be given greater macroprudential powers to tackle bubbles in financial markets before they build up, avoiding a repeat of the housing boom and bust. As well as giving troubled countries access to cheaper debt, eurobonds will reduce risk in the financial system by severing the link between banks and their governments’ debt, he argued.

Meanwhile national regulators need tools to limit lending in certain sectors or at certain levels “to take away the punch bowl before the party gets out of hand,” Turner said.