Politicians should not rush into reform of the banking system, says HSBC boss

City A.M. Reporter
BANKS in Britain and elsewhere have urged G20 leaders to coordinate implementation of regulatory changes and not rush into “an unrealistic artificial timetable” for reform, ahead of a key meeting this weekend.

“The progress made by the G20 has been impressive but it has now reached a critical juncture,” Stephen Green, chairman of HSBC and the British Bankers’ Association (BBA), said in the letter to UK Prime Minister David Cameron.

“We encourage you to press your fellow leaders to commit to the coordinated implementation of measures, to maintain the openness of their markets and avoid decisions which could result in a retreat to protectionism and regulatory arbitrage.”

G20 leaders are due to meet in Canada this weekend to discuss banking reform.

Banks in Germany, France and elsewhere have also pushed for coordinated action ahead of the meeting, industry sources said, backed up by the International Banking Federation [IBFed], whose members include national groups in the United States, Japan, China, Canada, Europe, India and South Africa.

“The changes to the Basel frameworks for capital and liquidity are clearly the current work priority,” IBFed said in a letter sent to regulators and officials.

“Time and care must be taken to get the individual elements of these reforms right and that implementation should not follow an unrealistic artificial timetable,” it said.

The G20 needs to avoid introducing regulation that results in reduced choice, competition and availability of credit and which would damage the economic recovery, the BBA’s Green said. His letter said proposals to change counter-cyclical capital buffers and other factors needed “further consideration and calibration”.