The world’s largest and most important banks should pay additional fees to address the risk that any liquidity shortfall in their institutions causes wider damage to the financial system, the International Monetary Fund said on Wednesday.
In a move guaranteed to heighten banks’ opposition to the regulatory reforms already under discussion for the largest banks, the IMF said more regulatory intervention was needed following the freezing up of markets and massive central bank intervention in the crisis.
“The extent of official intervention is clear evidence that systemic liquidity risks were underecognised and mispriced by both the private and the public sectors,” the IMF’s global financial stability Report said.