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Bundesbank president Jens Weidmann has added his voice to objections over the new US administration’s plans to relax the financial regulation put in place to prevent another financial crisis .
European Central Bank president Mario Draghi last week hit out at the Trump Administration’s plans to undo some of the regulations put in place under the Obama administration, saying going soft on banks was “the last thing we need”.
Mr Weidmann told Bild, Germany’s top selling tabloid in an interview published Thursday, that competitive deregulation between countries “must be urgently avoided”.
He also said that one of the lessons of the financial crisis was that banks need more capital and to be more strictly supervised.
US President Donald Trump has ordered a review of Dodd-Frank, which was put in place to limit the risk of a new financial crisis but which Wall Street banks and many conservatives argue is too burdensome.
Closer to home, German regulators — including the Bundesbank — have pushed back on new global rules on capital, which they say will unfairly penalise German banks.
Mr Weidmann also indicated that he is wary of becoming too close with Beijing in an attempt to boost trade with Asia at the expense of links with the US. While China had opened up “more and more”, it was not yet “a bright model for open markets”.
It was, he said “important to keep a cool head” and talk quickly to Washington to preserve a trade partnership that had served both countries well for decades.
Image via Reuters
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