Weber warns against over-regulation

03 September 2008 - “We can only ensure financial market growth and stability with the right blend of market and regulation”, said Manfred Weber, Chief Executive of the Association of German Banks, when presenting the
“Banking Survey 2008 – facts | opinions | outlook” in Frankfurt today. To set the right course in the financial markets in the future a clear-cut division of responsibilities between market participants, central banks, supervisors and legislators was necessary. All faced a comprehensive work programme.

“Yet the experience of the past few months shows”, Mr Weber continued, “that it is first up to the financial market participants themselves to get to grips with dislocation and turmoil.” Many of the required steps should be undertaken as part of efforts to improve market practices. The banks did not reject government regulation as such, since it was part of the solution.

“But rules for globally networked financial markets have to be agreed internationally and should always be checked for their practicability”, Mr Weber stressed. Otherwise flexibility and innovativeness would be killed, although both were urgently needed in the financial markets in the future as well to ensure growth and prosperity. Banking would always remain a risk-taking business. “Over-regulation, on the other hand, merely creates a false sense of security and quashes opportunities for growth in particular”, he said.

The “Banking Survey 2008 – facts | opinions | outlook” can be downloaded as a pdf-file.

Banking Survey 2008