G20 to take steps of strength
(8 September 2009 – Global) After their recent London meeting in the first weekend in September, the G20 Finance Ministers and Central Bank Governors have declared their steps to prevent another financial crisis, including reassessing the stability and risk management of banks.
The G20 financial leaders said that they have made progress towards the commitment to strengthen the financial system to prevent the build-up of excessive risk and future crises and support sustainable growth.
The primary impact to banks is the advice for action in the rapid progress in developing stronger prudential regulation by, among a range of risk management techniques, requiring banks to hold more and better quality capital once recovery is assured
The G20 financial leaders also recommended a range of actions for banks, including to introduce countercyclical buffers, develop a leverage ratio as an element of the Basel framework and to explore the possible role of contingent capital.
Further, the G20 financial leaders said that they call on banks to retain a greater proportion of current profits to build capital, where needed, to support lending.
Also, the regulatory bodies have agreed to more stringent capital requirements for risky trading activities, off-balance sheet items, and securitised products; they have developed proposals to address procyclicality, issued important principles on compensation and deposit insurance, and established over thirty supervisory colleges.
Among a range of other actions, the G20 financial leaders pushed the importance of a framework on corporate governance and compensation practices designed to prevent excessive short-term risk taking and mitigate systemic risk, on a globally consistent basis.
The primary impact to banks is the advice for action in the rapid progress in developing stronger prudential regulation by, among a range of risk management techniques, requiring banks to hold more and better quality capital once recovery is assured
The G20 financial leaders also recommended a range of actions for banks, including to introduce countercyclical buffers, develop a leverage ratio as an element of the Basel framework and to explore the possible role of contingent capital.
Further, the G20 financial leaders said that they call on banks to retain a greater proportion of current profits to build capital, where needed, to support lending.
Also, the regulatory bodies have agreed to more stringent capital requirements for risky trading activities, off-balance sheet items, and securitised products; they have developed proposals to address procyclicality, issued important principles on compensation and deposit insurance, and established over thirty supervisory colleges.
Among a range of other actions, the G20 financial leaders pushed the importance of a framework on corporate governance and compensation practices designed to prevent excessive short-term risk taking and mitigate systemic risk, on a globally consistent basis.
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