(December 8 – 09:15 ET) – The Financial Stability Forum has established a Task Force on the Implementation of Standards to bring internationally-accepted financial standards to the rest of the world, says John Palmer, superintendent of Canadian financial institutions.
The task force will be chaired by Andrew Sheng, chair of the Hong Kong Securities and Futures Commission, and it will be holding its first meeting shortly.
The forum was established in the wake of the Asian Contagion crisis as a coordinating body to promote the stability of the international financial system and improve market function. It is made up of senior officials of central banks, finance ministries and regulatory authorities from the G-7 countries and Australia, the Netherlands, Hong Kong and Singapore.
The forum is also forming a study group on deposit insurance. It will be chaired by Jean-Pierre Sabourin, the president of the Canada Deposit Insurance Corporation.
It has called for a paper examining the insurance business to be prepared with the assistance of the International Association of Insurance Supervisors. “With the formation of financial conglomerates, it is possible that any difficulties in insurance companies may quickly spread to deposit-taking institutions within the same group. Furthermore, with rapid consolidation in the insurance industry, we may be seeing a concentration of risk-taking which runs counter to the basic principle of insurance,” says Palmer.
Palmer heads a working group looking at the operation of offshore financial centres. It is due to deliver a final report in April, but Palmer said it has reached some preliminary conlusions: all offshore centers are not the same, and where financial supervision is weak they “seriously undermine efforts to strengthen the global financial system.”
-IE Staff