Analysis

IIF: G-20 leadership needed on macroeconomic and key financial regulatory issues

By Alexander Summerfield | Writer/Editor | 08/03/11

For the IIF, the range of important macroeconomic policy and financial regulatory challenges means that it is essential that regional and national policy approaches be strengthened and concerted by G-20 leadership.

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Charles Dallara, Managing Director of the Institute of International Finance (IIF), stressed this week that although global economic recovery has gained momentum in recent months, conditions remain fragile. He feels that there is a need for more effective policy coordination led by the G-20 on such key issues as exchange rates, high budget deficits and debt in numerous mature economies, mounting inflationary pressures in some emerging markets, as well as on outstanding major financial regulatory reforms.”

In a press conference following a meeting in Paris of the IIF’s Steering Committee on Regulatory Capital (SCRC), Frédéric Oudéa, Chairman of the SCRC and member of the IIF Board of Directors, noted that while a certain number of financial regulatory reforms have been agreed, a lot of work remains in order to put in place a balanced, workable regulatory framework.

M. Oudéa stated that the global financial industry supports a fundamental strengthening of the global regulatory architecture. He said, “We welcome the progress by the Basel Committee and the industry will move forward to meet the challenging task of implementing the new capital requirements.” He stressed that major concerns exist in the industry over the Basel Committee’s liquidity regime; over the possibility of special capital surcharges on large, complex financial firms; and over the major challenges that remain to create an effective and clear framework to develop a cross-border resolution regime that can mitigate any future possible call on taxpayers in the event of a bank failure. On this latter key issue he called on the G-20 to establish a high-level “multi-disciplinary” taskforce to forge agreements.

The IIF is the leading global association of financial services firms with more than 430 member institutions with their headquarters in over 70 countries.

Read the IIF press release and the statement by Frédéric Oudéa.