03 March 2009

Issing Committee outlines recommendations for new financial order

Macro-prudential supervision should become a major objective of banking supervision,  the Issing committee states. Other topics include a credit register, and the regulation and supervision of hedge funds and rating agencies.

Preparing for the G-20 meeting in London on 2 April, the German expert group issued its second report with recommendations to create a new financial order.

The report concentrates on topics such as a proposal for a risk map and a credit register,  regulation and supervision of hedge funds and rating agencies, the problem of procyclicality, and the role of international institutions and fora.

Macro-prudential supervision should become a major objective of banking supervision, complementing the traditional micro- prudential supervision, the Issing committee states.

The group also proposes a centralized approach to setting up a standardized credit register that is capable of mapping domestic and cross-border exposures simultaneously. Furthermore, the report propose a mixture of direct and indirect hedge fund regulation, and regulation on rating agencies to re-build their reliability and credibility.

The report as well as the Issing plan of November last year are attached below.