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Has the moment passed for bank reform?

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LEHMAN/A year on from the collapse of Lehman Brothers and there is plenty being written and broadcast about the lessons, the winners and losers and where we go from here.

Amidst all the noise, a relatively short (765 word) commentary from Barbara Ridpath who is head of the International Centre for Financial Regulation (ICFR) — a think tank set up to shape regulatory cooperation and best practice – makes some worthwhile points:

 

The sector’s problems are not yet behind us. Loan losses, which lag other indicators, will continue to build and cost banks in provisions for some foreseeable time to come. Nonetheless, some in the financial sector are choosing to think the worst is behind them. They hope that systemic change is not longer necessary because they have begun to make money again in such a low interest rate environment.

Legislators are working to implement G20 proposals either domestically or regionally with mixed results. It is remarkable how much easier it was to act in a concerted fashion when the world was in genuine crisis mode. Now that we appear to have stepped back from the brink, political unity has gone by the wayside. Political expediency, partisanship, and the settling of old scores have come to the fore. This is a shame.

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