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G20 set to endorse global regulatory rewrite


G20 set to endorse global regulatory rewrite

Aggressive battle plan expected this week

London – 30 March 2009.  Regulators are poised to seize the high ground and set aggressive targets at the G20 this week.  Following shows of force from Secretary Geithner, Lord Turner and Chairman Draghi last week, JWG-IT, the FS industry think-tank, predicts international bodies will follow the UK’s push for broad FS regulatory reforms on 2 April.  In an impressive series of back-room manoeuvres, it has taken less than a month for the UK to frame the regulatory debate in terms with which the US agrees.  PJ Di Giammarino, CEO of JWG-IT, comments:

“The window in which Europe’s wise men or the BRIC countries could have fought for a looser regime has now closed.  A world where the international institutions of the Financial Stability Forum, International Monetary Fund and the Bank of International Settlements are joined by a serious independent European regulator is not far away.  Look for a big push this week by G20 members to support the de Larosière and Turner recommendations.  A serious rework of capital adequacy, liquidity, hedge fund control, offshore oversight, remuneration and the supervisory architecture is now on the cards - starting this year.  JWG-IT applauds the speed at which the regulators have announced more comprehensive requirements for the banking systems’ risk framework.

Secretary Geithner told congress last week that “supervisors should apply more demanding liquidity constraints; and require that these firms are able to aggregate counterparty risk exposures on an enterprise basis within a matter of hours.” (here).  The FSA has said that “In the future the FSA’s supervisors will seek to make judgments on the judgments of senior management and take action if in their view those actions will lead to risks” (here).  The Financial Stability Forum (FSF) chairman, Mario Draghi, noted that the FSF and IMF have begun a process to pool analysis and develop a consistent approach to managing systemic risks at Friday’s FSA conference.

 “When JWG-IT talk to banks, we typically find the trader doesn't have a detailed view of the stress tests, the CFO doesn't know the reliability of the reference data and nobody knows who owns the records.  Key information needed for integrated risk management and regulatory compliance is locked in isolated silos and no single individual, or even a single operating committee, has an overall view.  These regulations are raising the bar on the firms’ infrastructure quickly.  Incomplete views of the risk landscape are no longer affordable.

For more information on the liquidity risk management report, ‘Liquidity risk: the new imperative’, see: www.liran.eu

About JWG-IT Group Limited

JWG-IT is the only financial services industry think-tank to facilitate collaborative work to resolve industry issues created by regulatory change.  Based on a working model started in 2005, JWG-IT has established strong relationships with EU administrators, leading firms and companies.  It is neither lobbyist nor consultancy and revenues are restricted to membership and event fees and content sales.  The JWG-IT Think-Tank is designed to help members and participants manage regulatory-driven change better, quicker, cheaper and with less risk.  JWG-IT launched the customer data management group and the liquidity risk action network in 2008.  For more information, see www.jwg-it.eu.

 

For immediate release

PJ Di Giammarino, pj@jwg-it.eu, +44 (0) 7811 430 503

Louisa Excell, Louisa.excell@hotwirepr.com +44 (0) 20 7608 2500



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