Regulators were once favorites at annual meetings of the International Monetary Fund (IMF), with audiences hanging on their every word that could signal moves to end multitrillion-dollar bailouts and devastate stock prices banks.

No more.

At the recent gathering of top political and business leaders in Washington, DC, many global watchdogs and central bankers sounded like people who knew they were shouting into the void about the urgent need to avoid another financial crisis with stronger measures. regulations.

“If financial stability disappears, as a government you can forget about other policy priorities,” warned Klaas Knot, chairman of the Financial Stability Board, on October 22 at a Bloomberg event in New York before attending the IMF meetings in Washington. “You will spend most of your time developing rescue plans for a plummeting economy.”

Knot, who is also governor of the Dutch National Bank, was trying to elevate the financial stability agenda in the minds of leaders who, he fears, are prioritizing other areas rather than implementing policies. already agreed reforms and the development of policies to address new risks. But privately, many senior policymakers have expressed concern that they are fighting a losing battle as the financial crisis triggered by the implosion of Lehman Brothers in 2008 fades from the collective memory of world leaders obsessed with growth.

Among those who sounded the alarm in public was Andrew Bailey, governor of the Bank of England, whose comments echoed those of Knot the next day at another event in Washington, where he was attending meetings of the IMF.

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“As you move away from a crisis, the memories fade away, they disappear in the rearview mirror and people say to me: ‘you’ve done all this, you can move on’” , Bailey said. “You might think you’ve done it thinking you’ve put a lot of regulations in place, but you’ve never ‘done it’ in terms of ‘the risk is gone.’ We must keep this in mind.

Nowhere is the problem more apparent than in the United States, where the watering down and possible abandonment of the latest package of post-crisis banking reforms has become emblematic of what many fear will be a major global regulatory conflict.

The current administration in Washington has already significantly scaled back a set of proposed rules, with the eight globally systemically important US banks now facing a 9 percent increase in their capital requirements to guard against unexpected losses and financial shocks, instead of the 19 percent initially set. requested by the Federal Reserve, the Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency. The review came following one of the fiercest lobbying campaigns by lenders.

Even the watered-down proposal faced criticism that it could raise lending costs, hurt the economy and weaken U.S. banks against international rivals.

Citigroup Chairman John Dugan said in Washington that he believed the latest package would likely not be finalized before the next president is inaugurated. Some fear the final version will be further weakened, particularly if former President Donald Trump takes over the White House.

“Almost everyone I’ve talked to, and I’ll certainly put myself in this camp, says ‘look, we just have to get this done,'” Bailey said of the package, which was accepted by global regulators in Swiss. city ​​of Basel after long negotiations in 2017.

On the sidelines of the IMF meetings, several regulators privately told Bloomberg News that they doubted the United States would implement the reforms in a Trump administration.

The European Union’s three biggest economies have already called on Europe to reopen part of the painstakingly agreed package. Several policymakers told Bloomberg News that these calls would receive broader support if the United States does not hold up its end of the bargain. Speaking at an investment summit this month, Prime Minister Keir Starmer told the audience his ministers would “eliminate” the bureaucracy that blocks investment and added he would ensure that every regulator in the UK “takes growth as seriously as this room”. .

Paweł Karbownik, undersecretary of state at the Polish Ministry of Finance, said EU financial regulations had gone “far too far” and that his country would use its EU presidency next year to ” reduce part of it. He said the recent rise of “populism” in Europe shows how desperately Europe needs growth. He was speaking at an event in Washington.

Deutsche Bank Chief Executive Christian Sewing echoed those comments on a panel later, saying Europe’s populism problem would worsen if growth did not return to the region. “We need to get the bureaucracy under control,” he said, noting that excessive “regulation” poses a particular burden.

Beyond implementing what has already been agreed, regulators are wary of gaining a mandate to tackle new risks, particularly from so-called “unsecured financial institutions”. banks,” including hedge funds, whose bets on Treasuries could destabilize markets, and the private assets sector, where opaque valuations could threaten the financial system as a whole.

“In the context of these meetings, we hear a lot about geopolitical fragmentation. I think if you look back and remember some of the lessons of the financial crisis, it was about global cooperation, fighting these risks together and the idea that financial stability is a global public good “, declared Sharon Donnery, member of the supervisory board of the European Central Bank on October 23.

“It’s important that we don’t forget these lessons,” she said.

But these voices risk falling on deaf ears.

At an event hosted by Semafor on October 24, UBS Group CEO Sergio Ermotti said it would be naive to think there would be complete alignment of regulations globally, citing the impasse of Basel as an illustration of the difficulties regulators face in implementing coordinated approaches.

“The failure of policymakers and regulators to deploy the same standards globally is a symptom that ultimately national interest or regional interests prevail over the need for implementation. comprehensive work on a global scale,” Ermotti said. BLOOMBERG