Bank system seen past danger point

LONDON (Reuters) - The global banking system is past the danger of systemic meltdown following government intervention, but there will still be economic consequences, the chairman of the Financial Services Authority said on Friday.

Adair Turner also told the Financial Times newspaper that regulators should sweep aside their previous assumptions as they look for a more effective global regime in the wake of the credit crisis.

"Although there are still going to be macro-economic consequences of what has occurred, I think we are past the point of the danger of where we were last week, where we could have had a fundamental systemic meltdown of the core plumbing of the world financial system," Turner was quoted as saying.

Regulators should now engage in a fundamental debate about how to set banks' minimum capital requirements following state bailouts in Europe and the United States, he said.

"When you've been through a crisis like this, it's rather sensible to wipe the slate clean in terms of all your previous assumptions," he was quoted as saying.

"We are going to have to return to a rule-driven approach and ideally that should be an international set of rules. And we are just going to have to see how rapidly the world can get back to an agreed set of rules."

Turner also said banks and insurance companies regulated by the Financial Services Authority would have to pay higher fees so the regulator could strengthen its supervision.

"Bluntly, we have been doing supervision on the cheap," he said, adding the FSA would have to hire more people and pay some higher salaries than it had in the past.

(Reporting by Mark Potter; Editing by Gary Hill)