Failure at the Financial Stability Board

In 2004, UNHCR maintained financial stability, although it was another challenging financial year.

UNHCR must not lose its relative financial stability.

The Financial Stability Forum, created after the Asian financial crisis as an informal coordinating body the United States resisted anything stronger was renamed the Financial Stability Board. A board sounds more impressive, authoritative, and permanent than a mere forum.

A number of indicators could be used, including financial evaluation (profitability) and non financial indicators (survival rate, stability of shareholding).

What central banks need now is a revised mandate that upholds price stability as the primary, long term objective, while allowing policymakers to pursue other objectives when appropriate. Specifically, the central bank should be able to move slowly on price stability if it regards the real economy as unacceptably weak, or if an asset price misalignment threatens financial stability and cannot be defused quickly by the new macro prudential instruments.

The Organization's programme objectives could not be implemented without a sound financial basis.

(b) Enhancing industry financial participation in the implementation of Strategic Approach objectives, including by

Despite serious financial and human constraints, my country has made appreciable progress towards those objectives.

Recalling the Stability Pact for South Eastern Europe, and stressing the importance of the implementation of its objectives, with emphasis on regional cooperation,

(iv) Inviting international financial institutions and intergovernmental organizations to prioritize Strategic Approach objectives within their programming

We believe that the IMF needs to move decisively on financial stability issues and be more proactive to help prevent and mitigate future crises. The IMF should work closely with the Financial Stability Forum, the Bank for International Settlements and other relevant international bodies.

In 2004, UNHCR stayed within the total financial resources available and maintained relative financial stability, helped by an unexpectedly high carry over from 2003 and careful management.

But trying to obtain stability from rigidity is illusory. The stability of the international financial system today depends on the willingness of countries with rigid exchange rates to allow greater flexibility.

Nor do large international reserves guarantee financial stability. There are better ways to enhance stability, from strengthening prudential supervision to taxing and controlling destabilizing capital flows and letting the exchange rate adjust.

Solid donor support and improved financial management had contributed to greater budgetary stability, so that the financial situation of UNHCR was better than it had been for years.

Other central banks have recognized the need for new instruments to ensure financial stability so must the BCB. Institutional clarity on the BCB s mandate for financial stability and the instruments at its disposal could help Brazil avoid future crises or at least weather them more effectively.

Here, the EU summit in December was an important step forward in terms of deepening political union and strengthening governance among the eurozone s member states. Nevertheless, more will be needed to restore financial stability, such as enlarging the total firepower of the European Financial Stability Facility.

At the same time, regulatory regimes have been toughened everywhere to prevent banks from jeopardizing the financial system again. For example, in addition to its price stability mandate, the Bank of England has been given the new task of maintaining the stability of the financial system.

We must ensure that international financial, monetary and trade policies are consistent with the requirements and objectives of development.

Civil society organizations also form a reliable partnership in pursuit of common objectives, including the mobilization of financial support.

It needs to rethink how to address financial stability in its day to day work with members. Financial sector analysis should become fully integrated into the IMF s surveillance activities.

The second complication is that, rather than converging, domestic models of financial regulation are multiplying, even among advanced countries with well developed institutions. Along the efficiency frontier of financial regulation, one needs to consider the tradeoff between financial innovation and financial stability.

In addition, higher degrees of macroeconomic stability in both developed and developing economies helped to limit the negative impact of global disturbances on individual countries, contributing to the observed stability of international financial markets.

The final knockout which would occur if the Financial Policy Committee (FPC) judges that the stance of monetary policy poses a significant threat to financial stability points to the third problem. The FPC is part of the complex new UK regulatory structure, in which the former Financial Services Authority has been split in two a prudential and business conduct regulator and a new body to monitor financial stability.

Secondly, the situation of ECA was worrying and the Commission must be given sufficient financial resources to attain its objectives.

The degree of internationalization of the RMB has continued to increase, and will benefit global economic and financial stability and growth.

With institutions established to think about the future, the IMF, the BIS, the Financial Stability Forum, couldn't see what was coming.

It was therefore all the more important to bring as much certainty and stability as possible to the Court's financial situation.

The notion of integrating asset price concerns into inflation targeting remains a source of significant controversy, with opponents citing the Tinbergen Principle if policymakers have one instrument, the interest rate, they can pursue only one objective, price stability. Attempts to pursue multiple objectives, the logic goes, would confuse financial markets and private sector agents.

Today s financial market turmoil has exposed weaknesses in the current global financial system, of which many were known but went unaddressed. This lack of action reflects the increased complexity and linkages of the global financial system, and the absence of an effective anchor for financial stability.

Stability will require the accelerated disbursement of pledged financial resources, more rapid implementation of social and economic project activities, and peacebuilding initiatives.

The European Stability Mechanism, for example, is a collective project aimed at safeguarding the eurozone's financial stability, not an instrument of domination or confrontation. The ESM's resources belong to everyone, just as one country's bankruptcy affects everyone.

Ultimately, this is merely a new round of the eurozone s old game of financial hide and seek, whereby losses are obscured by distributing them among different institutions and time horizons. The game started with the bailout fund for Greece, which was followed by the European Financial Stability Facility, the European Financial Stability Mechanism, and the International Monetary Fund, which in turn were relieved by the ESM.

The Council may evaluate the implementation of this Agreement, including the objectives and financial mechanisms, five years after its entry into force.

In the aftermath of the international financial crisis of 1997 1998, many emerging markets found themselves through currency depreciation, rapid productivity gains, or both highly competitive. Countries that ran significant current account surpluses, built up large reserves, and fixed (or heavily managed) their exchange rates in order to support the first two objectives appeared to secure external stability.

During the 1997 1998 Asian financial crisis, the renminbi s stability played an important role in stabilizing the region. So, too, the renminbi s stability has helped the region maintain strong growth, from which the world as a whole benefits.

On the financial situation of UNIDO, the Asian Group welcomed the stability and consolidation achieved by the Organization during the biennium 2002 2003.

Inflation targeting means that a central bank puts the pursuit of price stability above all other objectives. This is what the ECB does and what the Fed s Alan Greenspan does not do.

By tying senior managers pay to the bank s stability, the financial sector, advocates argue, would be forced to police itself. This incentive based regulation could bolster economic stability more effectively than expecting regulators to keep pace with banks risky activities.

The international community should identify a mechanism that allowed debt to be cancelled or reduced without compromising the stability of the international financial institutions.

We believe that the international community is capable of finding a formula to bring about debt cancellation without jeopardizing the stability of international financial institutions.

70. Encourages the international financial institutions and other development partners to support the resident coordinator system, including through enhanced dialogue, in addressing national development objectives

Deliberations on the scope, criteria and conduct of such voluntary peer reviews in the light of their objectives and available financial and human resources and

Successful implementation of summit outcomes required policy coherence and consistency, as inconsistencies between economic, financial and social policies were key obstacles to objectives being met.