Financial Regulatory Forum

   ROME, Nov 12 (Reuters) – The worst of the global recession is over with signs mounting of a slight pick-up in activity, European Central Bank Executive Board member Gertrude Tumpel-Gugerell said on Thursday.
   “Recent indicators suggests a stabilisation or slight pick-up in economic activity in the major economies, suggesting the most acute phase of the crisis might be behind us,” she said in a speech at a research conference.
   The euro zone economy contracted 0.2 percent in the second quarter, but economists expect it to have returned to growth in the third quarter. Figures for Q3 are due on Friday.
   Tumpel-Gugerell said it was widely acknowledged that poor financial regulation had contributed to the global economic crisis, noting that a prolonged period of cheap money may have exacerbated an unsustainable build up in debt and an asset price bubble.
   She said, however, that the emerging consensus among central bankers was that such asset price bubbles were best tackled through other forms of regulation, rather than interest rate policy.
   Capital and liquidity requirements will be a pillar of future regulation but the issue of how to regulate systemic risk was much more open, she said. 
   Tempel-Gugerell said there should be an official charged with assessing systemic risk at a European level, but she did not provide further details. (Reporting by Daniel Flynn; Editing by Mike Peacock) ((sakari.suoninen@reuters.com; +49 69 7565 1267; Reuters Messaging: sakari.suoninen.reuters.com@reuters.net))
 Keywords: ECB/TUMPEL GUGERELL 
  
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 Thursday, 12 November 2009 09:17:43RTRS [nLC410978] {EN}ENDS