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Stalling of bank reform effort may lead to new crisis - ECB

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Stalling of bank reform effort may lead to new crisis - ECB

Stalling of bank reform effort may lead to new crisis - ECB
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KAI PFAFFENBACH(Reuters)
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FRANKFURT (Reuters) - Global banking reform appears to be stalling, sowing the seeds of another crisis, European Central Bank supervisor Sabine Lautenschlaeger said on Tuesday.

"In times of crisis, everyone agrees that tougher rules are needed," Lautenschlaeger, an ECB board member, said in a speech. "But as soon as things start to get better, rules are suddenly seen as preventing banks from doing good business and the economy from growing.

"Consequently, rules are softened... the economy grows, and the seeds for the next crisis are sown – because such growth cannot be sustained in the long run."

(Reporting by Balazs Koranyi; editing by John Stonestreet)

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