Governments should be careful not to cause additional harm to the global economywhen putting in place new frameworks for financial regulation, says Deutsche Bank chairman, Dr Josef Ackermann.
Speaking at the biennial conference of the Federation of European Risk Management Associations (FERMA) in Stockholm this morning, the banking chief said: "I do not doubt regulators' good intentions, but from what we have seen in the course of the design and implementation of the new rules already under discussion, sound initial ideas for regulation often morph into bad practice."
Ackermann believes there is a serious danger that rule makers are underestimating the cumulative impact of all the regulatory changes on the economy. "Tougher capital requirements and the othe changes will impair the abiliy ofthe financial sector - banks and insurnace companies alike - to provide credit to the ceocnomy."
Risk management is crucial for successful financial institutions, he said, adding that revising and revisiting the tools used for risk management is vital following the recent 'tectonic' shift in the global economic outlook.
"In a world of uncertainty, risk discipline is the linchpin of commercial success," he warned.
Addressing the largest gathering of risk managers in Europe, outgoing FERMA president, Peter den Dekker advised delegates that the focus should be less on cost, and more on getting risk management right.
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