Donnerstag, 5. März 2009
Key Issues for the G20
The Centre for Economic Policy Research (CEPR) in London has published a report for the upcoming G20 meeting. It is called "Macroeconomic Stability and Financial Regulation: Key Issues for the G20" and contains contributions by different authors. Among the proposals made are an insurance scheme for countries with strong reserve accumulation and domestic expansion of the economy, an adjustment of the Basel II capital requirements to mitigate procyclicality, a centralized CCP for CDS trades, a requirement to have rating agencies paid by investors rather than issuers, the establishment of a harmonized special bankruptcy regime for banks and the creation of an international financial stability fund. Almost all of this has been heard before. However, the report may be an important indication for the content of the measures the G20 might adopt. Are we witnessing the emergence of a consensus?
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It is somehow astonishing that politicians, regulators and economists are keen on regulating credit rating agencies (CRAs) nowadays. Isn't it merely an indication of moving further along the regulatory spiral? The incredible importance of CRAs has been the result of the "prudential" regulation of banks which started in the 1980s (e.g. determining banks' regulatory capital ratios have since been based on ratings). Now, as regulators have made CRAs so important for their own business, CRAs are at the same time considered to be too mighty and blamed for causing (at least in part) the financial crisis. One may simply wonder...
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