Martin Cornish, partner, Katten Muchin Rosenman Cornish LLP
The recent G20 meeting identified, inter alia:
• Major failures in financial regulation and supervision
• Local and global systems needed to be strengthened including greater consistency of regulations and greater international co-operation between regulators
• Greater transparency from hedge funds and managers
• Regulated financial institutions must reduce risky sources of finance
• Excessive risk taking must be discouraged including inappropriate remuneration structures
• The scope for regulatory arbitrage removed
To this end the G20 have established the Financial Stability Board (which replaces the Financial Stability Forum) and is made up of G20 countries, current FSF members and other EU countries. Its brief will be, inter alia, to:
• Collaborate with the IMF and provide early warnings on macroeconomic and financial risks
• Reshape regulatory systems
• Extend regulation and oversight to systemically important financial institutions, instruments and markets – including...