Top White House economic adviser Lawrence Summers on Friday called for the United States to lead a global effort to improve regulatory standards and warned against allowing regulators to compete against one another.
Globally, the United States must lead a leveling-up of regulatory standards, not as has happened all too often in the recent past, trying to win a race to the bottom, Summers said.
Summers said U.S. Treasury Secretary Timothy Geithner in coming weeks will lay out the Obama administration's regulatory reform approach, which will be taken up at an April 2 meeting of the Group of 20 wealthy and major developing economies.
Summers said regulatory agencies should never be allowed to compete for the privilege of regulating particular financial institutions.
He said reforms should include requirements on levels of capital and liquidity that help to protect the overall financial system, even in very difficult times.
And there must be far more vigorous and serious efforts to discourage improper risk taking through transparency and accountability for errors, Summers said.
(Reporting by Lisa Lambert and David Lawder; Editing by Andrea Ricci)