Federal Reserve Board Chairman Alan Greenspan on Tuesday rejected calls from foreign bank supervisors to set up a new system for sharing information about international financial institutions.

"I do not believe that the need for a radical change in our framework for the supervision of internationally active financial firms has been demonstrated," he said in a speech to the Institute of International Finance.

Mr. Greenspan acknowledged that appointing "information coordinators" to collect and disseminate data on investment and commercial banks to regulators in other nations sounds good in principle. But he insisted that it would not work.

For one thing, Mr. Greenspan said, there are serious questions as to whether supervisors have the "expertise and resources" to provide meaningful oversight of global risk-taking by banks.

The information coordinator proposal is being developed by the Joint Forum of Financial Conglomerates, an umbrella group representing the Basel Committee on Banking Supervision, the International Organization of Securities Commissioners, and International Association of Insurance Supervisors.

Mr. Greenspan's speech to the spring meeting of the institute, a group of U.S. and foreign bankers, stood in sharp contrast to remarks by the Basel Committee's incoming chairman, Tom de Swaan. Mr. de Swaan, who spoke immediately before the Fed chairman, made the case for the Joint Forum's proposal.

A regulator with full access to each country's examination reports could have detected trouble at the Bank of Credit and Commerce International before its collapse, said Mr. de Swaan, who is director of the Netherlands' central bank.

Mr. de Swaan added, however, "The activities of the coordinator must not give rise to the creation of a new supervisory layer and must effectively improve the opportunities for supervising financial conglomerates."

Bankers at the conference said they saw little need for formal coordinators.

"The key is closer collaboration among national authorities," said Robert Hormats, vice chairman of Goldman Sachs International. "You need national regulators that are effective."

"The system seems to work pretty well right now," said Richard Seagall, head of fixed-income research at Spain's Santander Investment Securities. "There are no systemic problems."

Mr. Greenspan said regulators should simply continue improving international bank oversight through better disclosure of risks, increased cooperation among supervisors, and financial law reform.

"A continuation of this on-going process of careful and measured progress represents the most constructive strategy for ensuring financial stability," he said.

The Joint Forum's plan could mislead the market, Mr. Greenspan added. Investors, he said, might assume regulators have a comprehensive grasp of all the risks a financial institution faces.

"Wouldn't that reduce the incentives for market participants themselves to provide discipline?" he asked.

The proposal also risks expanding the safety net to overseas subsidiaries because investors would expect regulators to prop up these units in times of distress, Mr. Greenspan told the institute.

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