INTERNATIONAL: IMF – Initial lessons of the Financial Crisis

Tuesday March 10 2009

The International Monetary Forum (IMF) has released a report entitled ‘initial lessons of the financial crisis’ in response to a request by the International Monetary and Financial Committee and the G-20 leaders.

The document which is to be used as a background paper for the Group of 20 world leaders’ meeting in London in April, summarizes the initial lessons of the financial crisis along three dimensions: regulation, macroeconomic policy, and the global architecture for stability.

The IMF identifies key features that need to be actioned for a more functional regulatory structure:

* the expanding if national regulatory jurisdictions to include more institutions; the strengthening of market discipline as it breeds excessive risk-taking;

* the reassessment of accounting and regulatory practices in order to reduce pro-cyclicality;

* the elimination of gaps in information disclosure; and central banks should strengthen liquidity risk provisions to prevent systemic risk.

Click on the above link to download the paper.