Stevens Says G-20 Should Focus on Reform Implementation in 2014
Reserve Bank of Australia Governor Glenn Stevens said the Group of 20 should focus on implementing rule changes in the financial system rather than adding new reforms when Australia takes over the presidency next year.
“To task the regulatory community and the financial industry with further wholesale changes from here would risk overload,” Stevens said in the text of a speech today in Sydney. “By 2014 we will have reached a point in the financial regulatory sphere where the G20 should be looking for careful and sustained efforts at implementation of the regulatory reforms that have already been broadly agreed.”
Stevens, who didn’t address monetary policy or the nation’s economy in the speech, said the G-20 will need to remain open to the possibility there will be changes to the rules. “As experience is gained with implementation and we grapple with the inevitable difficulties, and as we learn more about how the financial system is likely to operate in a new world, we will want to make occasional adjustments,” he said.
Global regulators have introduced policies to shore up the banking system after the collapse of Lehman Brothers Holdings Inc. in 2008 that triggered a crisis in the U.S. and Europe. In Australia, which escaped the worst of the credit crunch, local regulators have accelerated requirements to increase bank capital reserves ahead of a global timetable.
“Our banking system overall, though hardly without blemish, stood up fairly well,” Stevens told the Australian Securities and Investments Commission forum today. “This was testament to generally sound management in most institutions and a robust supervisory approach. But there were still lessons to be drawn for Australia and the regulators here have given careful thought to them and to the associated global reforms.”
The RBA lowered borrowing costs by 175 basis points in the 14 months through December, matching a half-century low of 3 percent, to offset some of the drag on the economy from a high currency and to boost industries including construction as mining investment is predicted to crest this year. It kept interest rates unchanged at the first two policy meetings this year amid signs that past reductions are beginning to boost the economy.
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