The usually uneventful annual meeting of the Bank for International Settlements was jolted this week as delegates accepted some of the blame for recent financial excesses.

"Policymakers, including central bankers, have their own share of responsibility for the present difficulties," said Bengt Dennis, president of the association of central bankers.

"In a nutshell, we may have been too complacent," he said at the annual meeting of the central banks' organization, which is being held in Basel, Switzerland.

Mr. Dennis is in a good position to judge; as well as being president of the Bank for International Settlements, he is also the central bank governor of Sweden. And that country is going through its worst banking crisis in decades - a result of bad loans made during the easy-money years of the 1980s.

Central bankers had been wrong to view the surge in credit and money growth as a harmless byproduct of deregulation, he said.

"As a result, the laxity of credit conditions was often underestimated."

Some countries were not tough enough on inflation, encouraging speculators to think they could pay their debts back more cheaply in years to come, Mr. Dennis said.

Central bank regulators, moreover, were slow to catch up with the revolution in global financing techniques, he added.

The message from the meeting was that regulators need to do a better job at getting the balance right between letting market forces work and intervening to head off disasters.

"There's this problem of allowing people to develop their activities, to innovate, to find new markets, and then to make sure what they do is at the same time prudent," said Bank of Canada Governor John Crow.

"Anything that grows over 25% a year must be watched very carefully," said Alexandre Lamfalussy, general manager of the Bank of International Settlement.

Danger Seen in Swaps

He said major banks involved in the swaps business are very careful about controlling risk, and the overall market is probably safer than it was.

The links that swaps create between banks and nonfinancial institutions were, however, a potential pitfall, Mr. Lamfalussy said. He added that the lesson of the eighties was not to stop deregulating, but rather to deregulate better.

He offered the following advice.

* Proceed speedily but still give market participants time to prepare for the changes.

* Strike a proper balance across financial market segments so that competition among them is not distorted.

* Do not deregulate during an economic boom.

* Back up deregulation with stronger supervision so as to establish the rules of the game.

Mr. Lamfalussy was seconded by Mr. Dennis, who called for broader disclosure requirements, so the market could better judge creditworthiness.

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