Key priority is to restore lending through continued liquidity support and bank recapitalisation, the ministers agreed, and issued a common framework which outlines how to deal with impaired assets.
G20 Finance Ministers and Central Bank Governors issued a communiqué preparation for the London Summit. Our key priority now is to restore lending through continued liquidity support, and bank recapitalisation, the ministers agreed and issued a common framework which outlines how to deal with impaired assets.
Ministers also made recommendations to the London Summit to ensure that:
Ø all systemically important financial institutions, markets and instruments are subject to an appropriate degree of regulation and oversight, and that hedge funds or their managers are registered and disclose appropriate information to assess the risks they pose;
Ø stronger regulation is reinforced by strengthened macro-prudential oversight to prevent the build-up of systemic risk;
Ø financial regulations dampen rather than amplify economic cycles, including by building buffers of resources during the good times and measures to constrain leverage; but it is vital that capital requirements remain unchanged until recovery is assured; and,
Ø strengthened international co-operation to prevent and resolve crises, including through supervisory colleges, institutional reinforcement of the FSF, and the launch of an IMF/FSF Early Warning Exercise.
Futher issues ministers agreed up on include:
Ø regulatory oversight, including registration, of all Credit Rating Agencies whose ratings are used for regulatory purposes, and compliance with the International Organisation of Securities Commissions (IOSCO) code;
Ø full transparency of exposures to off-balance sheet vehicles;
Ø the need for improvements in accounting standards, including for provisioning and valuation uncertainty; greater standardisation and resilience of credit derivatives markets;
Ø the FSF’s sound practice principles for compensation; and
Ø the relevant international bodies identify non-co-operative jurisdictions and to develop a tool box of effective counter measures.
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