Financial regulators must decide whether global banks should be supervised by international bodies or on a country-by-country basis, Lord Turner, chairman of the Financial Services Authority, said on Thursday.
Speaking in Tel Aviv at the International Organisation of Securities Commissions, he told delegates the question of who bails out an institution in trouble needs to be resolved. Currently, responsibility for a troubled lender rests with taxpayers in the bank's principle residence. UK authorities argue that, as a result, supervision should remain with the national regulator.
However, Lord Turner said the issue is still up for debate. "There is real exchange of information [between national regulators] but it's how far we take that ... However far we go on that, until we have fiscal burden sharing we have still got governments looking at national supervisors and saying 'tell me it's ok'," he said.
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