Banks vow to improve transparency
The Institute of International Finance (IIF), a banking industry trade group, has promised to improve transparency about risk exposure and executive pay in the wake of the credit crisis.
IIF chairman Josef Ackermann, the chairman of Deutsche Bank, said more transparency was vital - in risk and liquidity management, but also in pay decisions. "Incentive compensation models should be better aligned with shareholders’ interests and long-term, firm-wide profitability," he said.
The report, written by a committee led by Scotiabank chief executive Richard Waugh, called for the creation of a market-monitoring group of 10-20 members, led by "senior financial statesmen", which would meet to discuss vulnerabilities in global financial systems. It would also be responsible for liaison with other financial stability regulators. Better information release on structured products would also help avoid another crisis, it said.
Waugh added that the main causes of the crisis had been "mispricing of liquidity, the mismatching of cashflows, and deficiencies in the originate and distribute models".
Another committee member, Cees Maas, formerly chief financial officer at ING, said the IIF was hoping to avoid too much involvement of government regulators. "Many of the problems that have arisen lend themselves to market-led solutions with the implementation of significant improvements in management areas by many individual firms. However, we recognise that there are areas where there may be benefits from further regulatory action."
The IIF launched the committee in November 2007. A final report will be issued in June.
See also: Paulson regulatory shakeup looks unlikely
US reforms mean more bailouts and centralised power
Iosco task force latest to investigate subprime crisis
IIF to draw up best-practice guidelines
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Buy side would welcome more guidance on managing margin calls
FSB report calls for regulators to review existing standards for non-bank liquidity management
Japanese megabanks shun internal models as FRTB bites
Isda AGM: All in-scope banks opt for standardised approach to market risk; Nomura eyes IMA in 2025
Benchmark switch leaves hedging headache for Philippine banks
If interest rates are cut before new benchmark docs are ready, banks face possible NII squeeze
Op risk data: Tech glitch gives customers unlimited funds
Also: Payback for slow Paycheck Protection payouts; SEC hits out at AI washing. Data by ORX News
The American way: a stress-test substitute for Basel’s IRRBB?
Bankers divided over new CCAR scenario designed to bridge supervisory gap exposed by SVB failure
Industry warns CFTC against rushing to regulate AI for trading
Vote on workplan pulled amid calls to avoid duplicating rules from other regulatory agencies
Top 10 op risks: change brings challenges as banks splash the cash
Higher interest margins and a trend toward insourcing drive major tech projects
Top 10 op risks: deepfakes drive rise in fraud fears
External fraud re-enters top 10 as artificial intelligence provides new tools for criminals
Most read
- Top 10 operational risks for 2024
- Top 10 op risks: third parties stoke cyber risk
- Japanese megabanks shun internal models as FRTB bites