Josef Ackermann has called for a globalisation of the tools and instruments that safeguard financial stability, saying that a “quantum leap” in the organisation of financial supervision was required.
Ackermann made the comments during a conference at the London School of Economics and Political Science (LSE) on Monday, organised by Deutsche Bank and the Financial Markets Group at the LSE. Hugo Banziger was also a keynote speaker at the one-day event, entitled The structure of regulation: lessons from the crisis of 2007.
The Chairman of the Management Board took part in a panel discussion on the future shape of financial markets regulation. Also on the panel, which was chaired by David Webb of the Financial Markets Group (FMG), were Howard Davies, director of the LSE, Paul Tucker, executive director of the Bank of England, and Charles Goodhart of the FMG.
Regulators should be willing to co-ordinate responses, Ackermann pointed out. However, he warned, the opportune time to change regulatory structure was not in the midst of a crisis.
Ackermann once again touched on the issue of transparency and how it was about more than just the disclosure of losses and exposure: it was highly valuable in restoring confidence.
In his 30 years in the industry, Ackermann noted that all the financial crises he had witnessed had started with a bubble. He believes that to ward off future crises these bubbles must be stopped before they begin. He called for the creation of a group of eminent people “wise men and women” who could monitor markets and issue warning signals at the right time.
Ackermann is a visiting professor at the LSE until September 2009, during which time he will be engaged in a range of teaching and research activities.