A Global Business Continuity Plan for Recovery and Reform

16th April 2009 by Raz Chaudary

According to Continuity Central the G20 at the London Summit has communicated a plan built upon decisions following the Washington G20 summit in November 2008 and included the following:

:· Regulators should develop enhanced guidance to strengthen banks’ risk management practices, in line with international best practices, and should encourage financial firms to re-examine their internal controls and implement strengthened policies for sound risk management.

·   Firms should reassess their risk management models to guard against stress and report to supervisors on their efforts.

· Regulators should take all steps necessary to strengthen cross-border crisis management arrangements, including on cooperation and communication with each other and with appropriate authorities, and develop comprehensive contact lists and conduct simulation exercises, as appropriate.

 

The London Summit communiqué builds upon these decisions

Key outcomes from the London meeting plan to “take action to build a stronger, more globally consistent, supervisory and regulatory framework for the future financial sector”

 

The recovery plan seeks to do whatever is necessary to:

·      restore confidence, growth, and jobs;

·      repair the financial system to restore lending;

·      strengthen financial regulation to rebuild trust;

·      fund and reform international financial institutions to overcome and prevent future crisis;

·      promote global trade and investment and reject protectionism, to underpin prosperity;

·      build an inclusive, green, and sustainable recovery

 

Concluding agreements

The communiqué also seeks to establish and promote greater collaboration between nations to “guard against risk” and “discourage excessive risk-taking” by strengthening regulatory systems and supervision.

Key Objectives

· establish a new Financial Stability Board (FSB) with a strengthened mandate, as a successor to the Financial Stability Forum (FSF), including all G20 countries, FSF members, Spain, and the European Commission;

· support the FSB and the IMF collaboration to provide early warning of macroeconomic and financial risks and the actions needed to address them;

· reshape our regulatory systems so that our authorities are able to identify and take account of macro-prudential risks;

· extend regulation and oversight to all systemically important financial institutions, instruments and markets. This will include, for the first time, systemically important hedge funds.

 

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