financial regulation

A Dangerous Game

  • Why it matters

    Why it matters

    The author warns that an end to international cooperation could spark a renewed race to deregulate.

  • Facts


    • In 2009, the G20 agreed to tougher financial regulation to avoid a repeat of the 2008 crisis.
    • The introduction of Basel IV, a key element of this regulation, was slated for January but has been delayed.
    • Mr. Trump has signed an executive order to review the Dodd–Frank Act, signed into law by former president Barack Obama in the wake of the financial crisis to protect consumers.
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G20 Finanzministertreffen
G20 finance ministers voiced their support for the Basel IV reform over the weekend, but the Trump administration is yet to declare its position. Source: DPA

It was meant to be a new beginning. One year after the U.S. investment bank Lehman Brothers went bankrupt, the heads of government and state of the leading 20 industrial and emerging nations met in Pittsburgh and agreed to nothing less than a new world financial order. The German finance minister at the time, Peer Steinbrück, was downright euphoric when he said “the community of nations is acting in concert.”

Eight years later, the fabric of a world so successfully woven is threatening to unravel. The new U.S. administration under President Donald Trump doesn’t seem particularly interested in international cooperation – on this or other issues. It is threatening a new wave of deregulation, acting on its own national interests and abandoning concerted action for a stable and secure global financial sector.

It is imperative that something is done to counter this.

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