Treasury’s David Gruen doubts Australia will finish the G20 financial regulation agenda by the Brisbane summit in November.
Australia may struggle to complete the Group of 20s financial regulation agenda, faced with growing hostility to further reform.
Treasury’s executive director of its macro-economics group, David Gruen, doubts all the relevant work will be completed during Australia’s 2014 presidency, which ends with the Brisbane summit in November.
Dr Gruen says there is debate about how long the “frenzy” of attempts since the global financial crisis to reform financial regulation should continue, and genuine disagreements about how much should be done.
However, he told a Committee for Economic Development of Australia conference in Canberra on Monday that a lot has been achieved.
Financial regulation before the 2008-09 GFC was woefully inadequate, although major players were not then aware of that fact.
“That’s a pretty sad state of affairs,” he said.
There were all sorts of glowing statements from the International Monetary Fund and some major regulators about just how stable the global financial system was because it had diversified risk, he said.
“As we discovered you had diversified risk to, largely, people who didn’t understand it rather to the people who could most bear it,” he said.
Australian Bankers’ Association chief executive Steven Munchenberg told the conference that this was probably an opportune time to stop, pause and assess the impact of what had been achieved, rather than coming up with new areas to regulate.