每日时讯英文阅读：Banks in move to limit their own scope

The defense actions and restructure measures that would taken by financial system.

Banks in move to limit their own scope

By Aline van Duyn in New York

Thursday, August 07, 2008

The world's biggest banks are proposing sweeping reforms that would limit the size and scope of their own businesses in one of the most dramatic responses so far to the credit crisis that has roiled markets for more than a year.

The proposals would limit the size of the future investor base for complex financial products, bring large swathes of the derivatives markets into regulators' sights and require banks to spend significantly more on technology and risk management.

The consequence is that many of the securitisation businesses that helped fuel the boom on Wall Street and in the City of London early this decade could be far smaller and bankers could face tougher oversight.

“No one has any illusions any more [about the severity of the problems],” said Gerald Corrigan, managing director of Goldman Sachs and former head of the Federal Reserve Bank of New York, who led the study on which the proposals are based.

“Costly as these reforms will be, those costs will be minuscule compared to the hundreds of billions of dollars of writedowns experienced by financial institutions in recent months, to say nothing of the economic dislocations and distortions triggered by the crisis.”

The proposals are backed by banks including JPMorgan, Merrill Lynch, Citigroup, HSBC, Lehman Brothers and Morgan Stanley.