- News Release 2009-035 -

Working Group 2
Summary of Report

The G20 Working Group on Reinforcing International Cooperation and Promoting Integrity in Financial Markets (WG2) was tasked with developing proposals in three broad areas: enhancing international cooperation and coordination in the regulation and oversight of financial markets; improving the management and resolution of cross-border financial crises; and promoting market integrity.

Cooperation between national regulators and supervisors is being enhanced through the establishment of collaborative international arrangements for the oversight of major financial institutions operating in more than one country. These arrangements are known as supervisory colleges and they allow for better risk management, information sharing and coordination between supervisors. Another priority is improving the arrangements for cross-border cooperation and communication in terms of crisis management and institution failure. The global financial crisis demonstrated that the collective response must occur in a coordinated and timely fashion that will not harm markets or confidence. The International Monetary Fund (IMF) will prepare a report on this issue, with input from other international bodies, for the next meeting of G20 Finance Ministers and Central Bank Governors.

WG2 considered ways to strengthen the operations and broaden the membership of vital international bodies such as the Financial Stability Forum (FSF), International Accounting Standards Board (IASB), the International Organization of Securities Commissions (IOSCO) and the Basel Committee for Banking Supervision (BCBS). An important achievement in this effort was the expansion of the FSF to all G-20 countries and Spain. WG2 recommended further reinforcing the links between international bodies such as the IMF (which focuses on its member countries' economic and financial policies) and the FSF (which concentrates on a country's financial standards) to better oversee the financial system and identify and respond to risks. Progress has already been made by the IMF and the FSF to strengthen collaboration, particularly regarding new approaches to jointly assess emerging risks and to draw lessons from the crisis.

WG2 also highlighted the work of key international organizations such as International Organisations of Securities Commissions (IOSCO), the Organization for Economic Co-operation and Development (OECD) and the Financial Action Task Force (FATF). These expert groups focus on setting high standards in business conduct, the exchange of tax information and the fight against illegal financial activity. WG2 supports the work already underway by FATF and OECD regarding tax information and efforts to combat money laundering and terrorist financing, and encourages all countries to adopt the more stringent standards and codes being developed.