The International Monetary Fund (IMF), yesterday held a High-Level Roundtable on Structural Banking Reform with participation of senior officials from finance ministries, central banks, and supervisory authorities from many regions of the world. This is the first time a discussion on this important policy issue was held on a global scale involving G20 and other countries.
The event was opened by IMF Managing Director Christine Lagarde, who observed that structural measures could be a useful addition to the financial stability policy toolkit. Ms. Lagarde emphasized that since these measures, applied to internationally active banks, are likely to have a far-reaching global impact, their design should reflect an equally extensive cost-benefit exercise. She encouraged policy makers to work cooperatively and structure such measures in a manner that increases their effectiveness and complements the global reform agenda.
The roundtable discussion was chaired by José Viñals, Financial Counsellor of the IMF, and was kicked off by the heads of commissions that developed the policy proposals, among them Paul Volcker, former Governor of the Federal Reserve, and Erkki Liikanen, Governor of the Bank of Finland. The ensuing debate covered coordination of alternative proposals from within the EU, the impact on host countries and emerging markets, and the interaction of these policies with the new Basel rules as well as the G20-led international reform agenda.
A number of participants felt that ensuring the mutual consistency of national policies is vitally important to attenuate complexity of implementation and avoiding unintended cumulative costs on the global financial system.
IMF First Deputy Managing Director David Lipton closed the event and emphasized that the design of national structural measures should complement the international reform agenda and balance costs and benefits at a global level, a task that is pending and needs to be taken up.