11 November 2008

IIF calls for Global Financial Regulatory Co-ordinating Council

Regulatory and supervisory structures built on national platforms must be more fully integrated and co-ordinated within a global framework, the IIF states and welcomes proposals for ‘colleges of supervisors’.

Regulatory reform “should be guided by the principles of greater co-ordination, consistency and efficiency”, the IIF said in its letter to President Bush ahead of the G20 meeting in Washington. “Effective regulation requires the ability to take a consistent, proportionate and cross-border approach”, IIF states and calls for the establishment of a Global Financial Regulatory Co-ordinating Council.

 

“It is imperative that regulatory and supervisory structures built on national platforms be more fully integrated and co-ordinated within a global framework”, the IIF states.

 

“Markets and firms are now globalized, and - in important respects - so must be regulatory standards”, the letter said. “The proposals for ‘colleges of supervisors’ for the top 30-40 global financial services institutions are well taken.”

 

The IIF also stated that the private sector takes responsibility for the shortcomings in the risk management of financial institutions that the crisis has exposed.

 

It is crucial for policymakers to take additional co-ordinated steps to foster recovery in financial markets and to avert a severe global recession," the IIF's letter said

 

Managing Director Charles Dallara warned that any takeovers must be "temporary," and that governments must sell their stakes as soon as the situation has been stabilised. A guiding principle to be agreed by the summit, said the IIF, should be that financial systems should be restored to a private sector footing, on a competitive market basis, as soon as circumstances allow.

 

Press release

IIF letter attached below

 

© IIF - Institute of International Finance