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Bundesbank President Axel Weber said on Monday that laying foundation for strong and sustainable economic growth is the most important task now.
Speaking at the Euro Finance Week in Frankfurt, Weber, who is also a European Central Bank Governing Council member, said there are a number of approaches to reach the above mentioned goal. The focus of the current reform of the financial regulation is consistent with the goal of creating a more stable and more resilient financial system, he asserted.
Weber said the new Basel III banking regulation will make banks more stable and thus create a first line of defense against systemic shocks.
The central banker said the transparency of the shadow banking system needs to be increased and these sector should have the same regulations, which are on the regular banking system.
Furthermore, Weber said there is no doubt that tighter regulation will make financial system stable. He insisted that it is important to find the right balance between stability and efficiency as the process of stabilization causes additional costs.
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