Note: The following is taken from a prepared statement by Treasury Secretary Tim Geithner at the G-20 Finance Ministers and Central Bank Governors Meeting … perhaps the most important point in it is that “all markets, including the derivatives markets, need to be subject to standards for stability and a framework for disclosure.”
Now turning to reform. The G-20 has agreed on a common framework of concrete changes to the international financial architecture. Risk does not respect national borders. We must establish a much stronger form of oversight and clear rules of the game, more evenly enforced across the international financial system. This will require comprehensive changes both at the national and international levels. The United States will soon be releasing a comprehensive framework of regulatory reform. Our strategy underscores our commitment to encourage a race to the top rather than a race to the bottom; a global move to higher standards.
We have committed to broad principles to guide the reform of the financial system:
First, all institutions that are important to the stability of the financial system should come within a much stronger framework of oversight, with clearer rules of the game that are enforced more evenly and consistently across countries.
Second, all markets, including the derivatives markets, need to be subject to standards for stability and a framework for disclosure.
Third, looking forward we need to provide much stronger cushions of stability to ensure that the framework of capital requirements and accounting standards dampens rather than amplifies future financial crises.
Fourth, we must promote financial market integrity. We welcome Switzerland’s announcement to increase information sharing as part of the global effort to end tax evasion.
Alongside this framework, we have expanded membership of the Financial Stability Forum, and we should elevate its role in the international system so that the global economy has – alongside the original Bretton Woods institutions of the IMF, the World Bank and the WTO – a strong institution able to lead these critical efforts to a more robust framework of oversight and standards for the global financial system.