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g20 progress ? September 26, 2009

Posted by Bradley in : financial regulation , trackback

It’s not entirely clear how meaningful any of this is yet, but there’s much more detail in the G20 leaders’ statement than in the crisis-related statements that came out of earlier meetings. There are some small commitments to the reform of governance of the IMF. And the statement links to the work of the Financial Stability Board, with approval of some of the details, for example with respect to compensation. The FSB published reports yesterday on improving financial regulation, improving stability, and on compensation.

The leaders’ statement claims that progress has been made in improving financial regulation:

Since the onset of the global crisis, we have developed and begun implementing sweeping reforms to tackle the root causes of the crisis and transform the system for global financial regulation. Substantial progress has been made in strengthening prudential oversight, improving risk management, strengthening transparency, promoting market integrity, establishing supervisory colleges, and reinforcing international cooperation. We have enhanced and expanded the scope of regulation and oversight, with tougher regulation of over-the-counter (OTC) derivatives, securitization markets, credit rating agencies, and hedge funds.

But the FSB suggests that it is nervous about some of the domestic developments in these areas. For example, with respect to CRAs the FSB notes:

Attention is needed to avoid requirements coming into place in different jurisdictions that have features that fragment rating markets or impose unnecessary burdens on CRAs.

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