G-30 report emphasises importance of qualitative aspects to supervision
A report by the Group of 30 working group on corporate governance, released on April 16, says new supervisory frameworks for regulating financial institutions should concentrate on qualitative as well as quantitative aspects of regulation.
The report, Towards Effective Governance of Financial Institutions, says that "in the policy-making debate, the qualitative aspect of supervision is sometimes overshadowed by quantitative, rules-based regulatory requirements. Clearly new capital, liquidity and related standards are essential to a more stable global financial architecture, but enhanced oversight of the performance and decision-making processes of major financial institutions is also essential".
The working group, chaired by Roger Ferguson, interviewed senior management at 36 major financial institutions. It finds that all stakeholders in the management of financial institutions must reassess their approach to governance, and that the "rewards for good governance are great".
Click here to read the report.
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