Oil price imbalance: the top concern for global financial stability

gaoyanmei

Oil price imbalance: the top concern for global financial stability [Copy link]

Bankers and financial regulators around the world are growing increasingly concerned about the commodity boom and the risk of oil price misalignment. These factors top a list of major concerns about the stability of the banking system, ahead of fraud and the expansion of hedge funds. Commodities have risen sharply in the ranking of perceived risks over the past year, according to an influential survey published on Monday. The survey, called "Banking Risks," was conducted by the Center for Financial Innovation, a financial markets think tank, and shows how financial market stability is linked to oil demand in emerging markets and to potential supply disruptions from terrorism or unrest in the Middle East. Commodity-related derivatives trading has been one of the fastest-growing areas of business for big investment banks in recent years, spurred by rising prices and a growing number of institutional investors investing in commodity assets. Recent sharp moves in copper prices have fueled rumours that some banks have suffered major trading losses. So far, those rumours have not been confirmed. As governments around the world step up their scrutiny of financial institutions and banks spend more time and money implementing new regulations, such as the new Basel Accord framework for measuring capital adequacy, over-regulation has once again become the main concern cited by respondents. European financial institutions complained most strongly about over-regulation, while their American counterparts were more concerned about derivatives and the growth of hedge funds. The survey showed that the perception of risk among respondents has risen for the first time since 2002. 468 bankers, regulators and other financial system practitioners from 60 countries and regions participated in the survey.