Banks will need a “healthy push” by governments to fix balance sheets, abandon risky businesses and serve the public to avoid prolonging the financial crisis...
Almost four years after the collapse of Lehman Brothers Holdings Inc., lenders still hold overvalued assets and are postponing necessary recapitalizations while relying on official funding, especially in Europe...
Banks are also returning to risks akin to those that led to the crisis .... and governments need to put more pressure on them by enacting and enforcing new rules.
“Public policy must move banks to adopt business models that are less risky, more sustainable and more clearly in the public interest,” the BIS said in the report.
“Governments can give the banking sector a healthy push in this direction...Please re-read the highlighted text as the BIS has summarized why and called for policymakers to adopt the Swedish model with ultra transparency.
It is only under the Swedish model with ultra transparency that
- Banks are required to fix their balance sheets;
- Banks are subjected to market discipline to adopt less risky business models; and
- Banks focus on activities that support the growth of the real economy.