In the past, Asian governments expected western counterparts to be role models of good governance. One story illustrates how times have changed. This year, a European banker consulted the Reserve Bank of India to learn how to get a banking licence in India. He was briefed on the conditions and told that the Indian authorities would also assess his regulator. The European banker smiled and said: “No problem. We have excellent regulation.” The Indian officer replied: “After subprime, we are not sure of US regulation; after Northern Rock, British regulation; after Société Générale, French regulation and after UBS, Swiss regulation.”This is very different from the times when banks from Asian economies were considered suspect until proved innocent.
Wednesday, October 29, 2008
Financial regulation: west on trial now
Kishore Mahbubani, former foreign minister of Singapore and currently Dean of Lew Kuan Yew, University, makes the point that the quality of regulation in western economies will now be closely watched by Asian regulators.