Friday, October 02, 2009

G-20 meet and proposed solutions

The G-20 has promised to get tough with banks. And the proposals are stronger than the ones talked about earlier. So far, so good. But is it good enough? No. Because higher capital, executive pay linked to risk and stiffer regulatory requirements for large banks will not stave off the next crisis, if only because the solutions that finally get implemented will not be tough enough.

We need better macroeconomic mangement. In other words, regulation must be supplemented by "macro-prudential" surveillance. More on this in my ET column, Tame the economy, not the banks

1 comment:

Abi said...

Your link is wrong!