For a new international financial order : responsibility, ethics and efficiency
The 23rd of March, gathered under the chairmanship of Alain Lambert, the finance commission of the French Senate approved the conclusions of its working group on financial and monetary international regulation, chaired by Philippe Marini, general reporter of the commission.
The stake of international financial regulation is to master globalisation and make its benefits exceed its disadvantages, so that it answers the needs of the people. The finance commission of the French Senate has decided to contribute to the current debate, which should be seen at first as a political matter.
The working group has studied various forms of recent financial crisis, which reinforce the need for regulation. It has identified five tracks of reform of the international financial system, in order to put an end to the inconsistencies and deficiencies of present regulation devices :
- As far as international organisations are concerned, a reinforcement of the legitimacy of the IMF and the World Bank and a better co-ordination of their actions in order to avoid their overlaps is required to improve the soundness of the whole system. Regional organisations (regional development banks and regional monetary funds, in Asia for example) should be developed, and the fight against poverty intensified with a substantial but well-defined debt relief.
- Financial actors should better assess and master their risks, as they may be borne by the entire world. This goal implies the enforcement of new compulsory rules of disclosure, and a reform of the Cooke ratio.
- It is necessary to strengthen external prudential control of financial companies, by ensuring a better co-ordination between national and international control authorities, and by providing the IMF with a role of " supervision of supervisors ".
- The fight against financial delinquency and for the reduction of " black holes " that correspond to offshore territories should be increased by placing this goal at the core of the commitments of the international community and of the design of new regulation devices.
- The irresponsibility of public and private actors has to be reduced with costly and deterrent interventions of a last resort lender, and by incorporating compulsory clauses into bonds that are issued. The implementation of these devices imply that the private sector has to share the burden in case of financial crises.