Liikanen: Capital and resolution rules will not suffice
Bank of Finland governor, Erkki Liikanen, has insisted capital requirements, and recovery and resolution plans cannot deliver stability in the financial system without the structural separation of banking activities.
Liikanen acknowledged the importance of capital adequacy and liquidity requirements specified in the Basel III accord, but detailed scenarios where he believes they will fall short. He said capital requirements will stem the incentives for excessive risk-taking in some instances
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