Steinbrück outlines future financial-market rules

08 October 2008

The German finance minister calls an international consensus about a ban on certain detrimental short-selling practices. He also recommends retention of up to 20% in the case of securitizations.

German finance minister Peer Steinbrück outlined a series of proposals aimed at restoring confidence on financial markets. In a letter to his colleagues in the G7 member countries he outlined 8 priority areas which have to be agreed upon.

 

Steinbrück called for co-ordinated action on short-selling and calls for an international consensus about a ban on certain detrimental short-selling practices.

 

As for the retention in the case of securitizations the Finance Minister proposes that the selling institute should be obliged to retain retention of up to 20%.

 

It must also be prevented that finance industry can shift risks from financial institutes’ balance sheets and thus circumvent prudential capital requirements, he said. Also, referring to the Basel Committee’s call for liquidity buffers, Steinbrück wants “to put a figure on these buffers and implement them as quickly as possible at international level.”

 

Further issues include:

• International standards on greater personal liability for the financial market participants accountable
• Adjusting incentive and remuneration schemes in the financial sector
• Enhancing co-operation between national regulators; and
• Closer co-operation between FSF and IMF.

 

Full statement attached below

 

© Bundesfinanzministerium