BIS’s Restoy warns against ‘supervisory straitjacket’

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Regulators should be wary of rules-based approaches to banking sector intervention, as they may find themselves in a “supervisory straitjacket”, Fernando Restoy warned on September 12.

The head of the Bank for International Settlements’ Financial Stability Institute examined the US’s “prompt corrective action” (PCA) framework in remarks to a gathering of supervisors. The PCA regime contains capital triggers that require regulators to impose remedial measures.

Restoy cited a US report that foun

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