John G. Heimann, who was comptroller of the currency during the Carter administration, will soon be practicing his regulatory skills on a global stage.

In February, Mr. Heimann will retire from his post as chairman of Merrill Lynch & Co.'s global financial institutions practice so he can lead the effort for improved supervision of banking systems around the world- particularly those in troubled emerging markets.

As chairman of the newly formed Financial Stability Institute of the Basel, Switzerland-based Bank for International Settlements, Mr. Heimann, 69, will be responsible for promoting better and more independent supervision of banks, capital market activities, and insurance.

Most of the institute's focus will be on improving financial supervision and enforcement in emerging markets.

"You can draft the greatest supervisory system in the world but if you don't have the journeyman to build it, it won't work," Mr. Heimann said during a recent interview.

The Financial Stability Institute was formed in part to deflect criticism that the Bank for International Settlements could have done more to avert the current global financial crisis.

Lack of adequate regulatory supervision, Mr. Heimann noted, helped trigger the financial crisis that spread across Southeast Asia, rocked Russia, and even rattled relatively soundly regulated financial markets in Latin America.

"When you have bad economic policies and a weak financial sector, you get a disaster," Mr. Heimann said.

Mr. Heimann noted that though regulators and institutions such as the World Bank and International Monetary Fund have for most of this decade been trying to coordinate worldwide regulatory practices, there is still a big gap between institutional agreements and reality.

"The purpose of the institute is to create a common understanding so that the supervisory authority in each country understands exactly where things are supposed to wind up."

Mr. Heimann is an old hand at bank regulation. In 1975 the New York native was named as the state's superintendent of banks. Two years later Mr. Heimann became the comptroller of the currency, a position he held until 1981.

In his post at Merrill Lynch, Mr. Heimann is chief manager of relationships with banks and other financial institutions around the world.

He is the first to admit that a worldwide central regulatory authority is still a long way off. But that, he adds, is not the purpose of the Financial Stability Institute.

Instead, the main goal is to bring regulators from around the world together on a regular basis to reach a common understanding, and then getting them to implement and enforce common standards.

But with the world still wending its way through the worst financial crisis in decades, shouldn't all of this have been done much sooner?

"Unfortunately, the most dangerous four words in the English language are 'this time it's different,'" Mr. Heimann remarked. "And human nature shows that the lessons of history have to be repeated."

Still, he added, policy to deal with the current financial crisis is a lot better than it was in the 1930s, when a decision by the Federal Reserve Board to tighten monetary policy triggered a major liquidity crisis followed by an economic depression.

Even if there still remains a great deal of uncertainty about where Japan's economy is heading, strong U.S. and European economies and a relatively strong economy in Latin America have helped mitigate the impact of the Asian crisis.

And though Russia's financial markets have suffered a catastrophic setback, Russia's economy is so small that the crisis has had little impact on the rest of the world, Mr. Heimann noted.

He said the world has achieved considerable progress in managing economic crises.

"Today, we can have a Drexel Burnham or LTCM (Long Term Capital Management) disappear without bringing the house down," Mr. Heiman said.

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