Financial reform to get backseat ride at Rome G7
Posted Under: Uncategorized
By Brian Love and Huw Jones
PARIS/BRUSSELS (Reuters) - G7 finance ministers are expected to renew commitments to better regulate and supervise banks and financial markets when they meet in Rome later this week, but renewed promises may be as far as it goes.
Information gleaned from officials in recent days indicates that stopping the rot of recession is the top, and perhaps sole, priority right now, even if reformers keep working away at rule changes to make markets less crisis-prone in future.
Some officials, however, say negotiators are getting close to agreeing on expanded membership of the Financial Stability Forum, which was set up by G7 countries after the Asian financial crisis in the 1990s and is now being pressed to embrace some of the key emerging market economies.
South Korea hopes it will be among those allowed to join the expanded FSF, and is awaiting news as early as the end of this week at the G7, Choongsoo Kim, South Korea’s ambassador to the OECD told Reuters.
Others are less sure the names will come so fast, and big as that news may be for any new entrants, other outstanding issues are whether and to what extent the FSF, for now a moving circus of regulators and supervisors with a small secretariat, is turned into a more global rule-making institution.
That, officials say, is still a work in progress, even if the state of play in those negotiations is broached by FSF head and Italy central bank boss Mario Draghi in talks with ministers and central bankers in Rome, where they start with dinner on Friday and meet again on Saturday.
What to do, concretely, about supervising cross-border banks better controlling derivatives trading, or being more vigilant about tax havens and the role of credit rating agencies is all still under debate.
Some officials suggest it will be hard to conclude even when leaders of the G20 club of industrialized and emerging economic powers meet on April 2 for a summit British leader Gordon Brown is billing as the time to deliver on reform pledges G20 leaders made in November at a first summit on the financial crisis.
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