“The banking system now has more tangible common equity than it did and would now be more resilient in the face of shocks.” Nevertheless, he maintained that “the global environment is probably less benign after 10 years than any of us that were sitting around the policy table back in 2009, 2010 would have thought.” The reformed regimes were not calibrated for conditions of weak trend growth and a badly depleted macroeconomic-policy arsenal, he explained. Tucker emphasized that the core of the world’s banking system is more resilient now than before the crisis. As indicators of this, the Fed has only recently started to withdraw its extraordinary monetary stimulus, the ECB is still adding stimulus, the agreed core of the regulatory reform program is still being implemented and, in the US, parts of that program are being questioned by legislators and challenged by bankers. Ten years after the beginning of the global financial crisis in the summer of 2007, we about one-third of the way through the process of adjustment back to normality, Tucker suggested. A vibrant system needs market discipline, and that falls largely to asset managers and their investing customers, Tucker said. To prevent this requires taking a medium-to-long term view. If another crisis were to occur, he warned, the very survival of a market-based economy might be in jeopardy. He urged asset managers and others to weigh in on the side of stability. Speaking at the 70 th CFA Institute Annual Conference in Philadelphia on May 23, Tucker observed that policies needed to make the financial system resilient risk being undone. We live in a joined-up world and the only way to make our banking and financial system safe is to collaborate, asserted Sir Paul Tucker, chairman of the Systemic Risk Council (SRC).
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