Asia Risk 15: Ryozo Himino, Japan FSA

Regulators are preparing to introduce a glut of new regulations to improve the resilience of the financial system. But this should go hand in hand with the use of policy tools to prevent asset price bubbles, argues Ryozo Himino

Financial institutions across the globe face a deluge of new regulation in the wake of the financial crisis. Banks will be forced to hold a greater proportion of high-quality capital so no-one will doubt the solvency of any institution that suffers a big loss. Firms will also be required to maintain large liquidity buffers comprising highly rated liquid assets to avoid a repeat of the problems that enveloped Northern Rock and others during the worst of the crisis. Meanwhile, regulators have