Global Finance Leaders Say Banks Must Take Responsibility For Restoring Market Confidence

“Banks worldwide must improve their financial transparency and strengthen their approach to managing risk in the wake of the global credit crisis, financial experts said Wednesday. In an interim report released in Frankfurt, the Institute of International Finance (IIF) - a global association of financial institutions - said the industry itself must restore confidence. …

The run of write-downs by banks worldwide has caused global markets to oscillate wildly, but ultimately the only thing that can bring a sense of normality is better management of liquidity and more openness, the report issued by the IIF found. …” [The Associated Press/Factiva]

Reuters notes that the IIF “…called for an urgent rethink of standards that force banks to put a price on their assets despite choppy markets, saying they could spark a downward spiral and make problems worse. The financial lobby group said the industry should be allowed to take the lead in preventing further crises, even as policymakers from the G7 major economies work on proposals for tighter financial supervision.

‘We are resolved to do our utmost to clean our house first and not to leave it to the regulators to do it for us,’ said IIF Chairman Josef Ackermann, unveiling the group's interim report in response to the financial market turmoil. ...” [Reuters/Factiva]

AFP writes that the IIF “said Wednesday it wanted to create a panel of experts to preempt financial crises in the future. ‘We are considering the establishment of a Capital Markets Monitoring Group,’ a statement quoted Ackermann as saying. ‘We are considering a group of approximately 10 to 20 highly respected experts and eminent leaders of finance who can combine their experience and knowledge to alert the industry to actual and potential vulnerabilities and market developments that pose systemic risks.’ …” [Agence France Presse/Factiva]