| WASHINGTON, April 9
WASHINGTON, April 9 Bank regulators need to
develop much simpler rules to make it harder for large financial
firms to game the supervisory system, Bank of England official
Andrew Haldane said on Tuesday.
"We need to do a radical pruning, simplifying of our
regulatory apparatus (that) places much less emphasis on what
are unreliable measures of risk," Haldane, the BoE's executive
director for financial stability, told a conference sponsored by
the Federal Reserve Bank of Atlanta.
He said current international capital rules place undue
burdens on small firms and may exacerbate, over time, the
problem of banks that are seen as "too big to fail."
"Complex frameworks if anything are easier to arbitrage,
easier to game," he said.
Haldane said that the world's major economies essentially
allowed banks to regulate themselves in the run-up to the global
financial crisis of 2007-09, with disastrous results.
"We have moved to a system where we essentially ask banks to
grade their own exams," he said. "The self-regulatory regime
that we've put in place has been gamed successively."
The Dodd-Frank Act, the U.S. financial reform law that
Congress passed in response to the financial crisis, is some
2,300 pages long, and has been criticized for its complexity and