Rules intended to strengthen financial position of banks impose undue strain on credit availability, Bank of England's interim Financial Policy Committee member Alastair Clark said Thursday.
The committee should seek to strike a balance between two, he said in a speech to the Society of Business Economists' Annual Conference.
Policy makers may have ended up front-loading rules more than intended. "In our international regulatory initiatives, we may inadvertently have ended up front-loading the regulatory response more than was intended," Clark said.
Even though regulators have given extended timetables for the implementation of Basel III, market pressures have tended to foreshorten the effective period of adjustment, he observed.
"And there is always the risk that, if too relaxed a timetable is adopted, the commitment to reform will progressively evaporate," said Clark.
by RTT Staff Writer
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