The level of risk facing China’s financial system could be higher than was seen in the United States before the global crash, according to a former Chinese finance minister. Speaking at a forum in Beijing over the weekend, Lou Jiwei, now chairman of the National Social Security Fund Council, also described the state of China’s financial sector as “messy”.
US Federal Reserve Chairman Ben Bernanke said banks need to have more capital at hand in order to ensure the financial system is stable. Bernanke said regulators were taking steps to force financial institutions to hold higher capital buffers, even if they allow for a long period of implementation to prevent any market disruptions.
Progress to restore global financial stability has suffered a setback in advanced economies, the International Monetary Fund said in its latest Global Financial Stability Report, with markets still sensitive to negative surprises.
The Executive Board of the International Monetary Fund (IMF) has approved making financial stability assessments under the Financial Sector Assessment Program (FSAP) a regular and mandatory part of the Fund’s surveillance for members with systemically important financial sectors.
Argentine President Cristina Kirchner called on Monday for an international system of financial regulation ahead of the G20's next meeting in Seoul.