Germany to advocate ‘world risk map’
By Chris Bryant in Berlin
Published: November 14 2008 13:39 | Last updated: November 14 2008 13:39
German chancellor Angela Merkel is set to push international leaders to draw up a “world risk map†of global financial institutions to allow financial authorities to quickly identify future trouble spots.
Unveiling the findings of a government-commissioned expert panel on Friday Mrs Merkel also proposed the creation a central body to oversee credit ratings agencies, an international register of major loans and the better alignment of managers’ pay to discourage short-term risk taking.
The chancellor and finance minister Peer Steinbrück are expected to lobby at the G20 world financial summit in Washington this weekend for all financial institutions, markets and jurisdictions to be made subject to proportionate regulatory control in order to eliminate “blind spots†in the financial system.
This supervision is intended to shed more light on the opaque workings of hedge funds and insurance companies, which the government believes have contributed to the severity of the current crisis.
The idea has found support in Europe, the US is thought to be hostile to what it views as a heavy-handed approach.
Ms Merkel said on Friday she was "somewhat surprised" about warnings against too much regulation before the crisis had been overcome.
Although Berlin has also sought to play down expectations for detailed solutions to the crisis Ms Merkel said she remained “optimistic†about the chances for progress.
The chancellor will go to Washington armed with a set of policy ideas prepared in the past two weeks by a six-strong panel led by Otmar Issing, a former European Central Bank chief economist.
Prof Issing said the panel had considered ways to reform the world's financial architecture in order to prevent a repeat of the current crisis which had left the financial system "on the edge of ruin". (more at link)
http://www.ft.com/cms/s/0/97c3f92e-b245-11dd-bbc9-0000779fd18c.html
