Seoul: The head of the Basel Committee on Banking Supervision urged emerging market economies to adopt new rules on bank capital even though they may feel they have sufficient regulatory arrangements in place.
Nout Wellink argued that countries should not use the excuse that they did not cause the global credit crisis as a reason to sidestep the implementation of new standards.
"I should point out that all [countries] were affected indirectly through the global economic downturn. This includes emerging market economies," he told a conference on financial reform in Seoul.
However, policymakers from a number of emerging market economies said the new rules failed to take into account their need for further economic growth.
"The issues of financial sector reform are beginning to overshadow the macroeconomic problems we face," said Lesetja Kganyago, director-general of South Africa's National Treasury, noting that requirements for banks to hold more cash didn't take into account the impact of capital inflows to emerging market economies.
Nguyen Van Binh, deputy governor of Vietnam's central bank, said some of the new rules proposed by the Basel Committee were inappropriate for developing nations.
"The regulations agreed by the developed countries may work for the big banks in the developed world but might not work well for small banks in the developing world," he said.
Both Binh and Kganyago, sitting on a panel with Wellink, said that the proposed new liquidity rules were the main concern for the banks within their country. "The rules shouldn't result in a disruption of capital flows," he said.
Mario Draghi, chairman of the Financial Stability Board, said the new reforms would not be imposed on all economies.
"Part of the reforms will be the same because it is a level playing field but then you have to recognise that countries and different jurisdictions do differ," he said.
