(RTTNews) - Leading G20 countries should not be looking to break-up large financial institutions, restrict their activities, or impose special taxes or capital requirements, as part of reforms to prevent a repeat of the financial crisis, a leading bank lobby group has said.
The Institute of International Finance said the size of a bank alone is not a determinant of systemic risk.
"Large global financial services firms bring enormous benefits to the international economy and these could well be lost if regulatory bodies focus excessively on limiting the scale or scope of these firms," said Charles Dallara, IIF managing director.
The IIF also said G20 lawmakers should set up a taskforce to watch over cross-border banks and that mechanisms for handling of failing banks must be harmonized globally.
The lobby said shareholders and unsecured, unprotected creditors should me made to bear the greater share of losses before taxpayer money is used to bailout trouble-hit banks.
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updated May 24, 2010
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