Requiring systemically important banks to hold extra capital is one of many steps regulators must take to make the global financial system safer, a top Wall Street regulator reiterated on Tuesday.
With memories of the 2007-2008 financial crisis already fading, some banks were calling for a return to business as usual, a call that regulators should reject, New York Federal Reserve Bank President William Dudley said in remarks prepared for delivery in Hong Kong.
Dudley did not comment on the economic outlook or monetary policy in the speech, which was virtually identical to one he gave in Tokyo on Monday.
We have seen that business as usual results in unacceptable outcomes, said Dudley, whose regional Fed bank is tasked with regulating Wall Street. As the crisis recedes in memory, the natural reflex will be to relax and grow complacent.
Regulators must work together to share information and ensure a level playing field, he said.
We need that to discourage regulatory arbitrage and beggar-thy-neighbor policies that might benefit narrow national constituencies at the expense of global financial stability, Dudley said.
(Reporting by James Pomfret and Ann Saphir; Editing by Chris Lewis)