DECEMBER 16: The International Monetary Fund (IMF) has planned financial system stability assessments (FSSAs) for India and Brazil as part of global efforts to help countries strengthen their financial sectors.The FSSAs are a form of "peer review" in that they are prepared with the participation of outside experts drawn from national supervisory agencies, a Canadian finance ministry statement said while referring to IMF's plans for such assessments for some selected countries.Improved financial sector regulation and supervision is being seen by the Group of 20 (G-20) industrialised and emerging market countries as one of the important ways to prevent financial crisis by making national economies less vulnerable to adverse developments at home and abroad.In the G-20, Canada and South Africa have undergone FSSAs.Improved financial sector "surveillance" by the IMF and the World Bank will help identify and address vulnerabilities in financial systems and help observance of core principles, standards and good practices by member nations in the G-20 according to the statement.The statement, on the importance attached by G-20 to improved financial sector regulation and supervision to decrease countries' vulnerability to financial crisis, was released in connection with today's inaugural meeting of the three-month-old informal consultative forum of the Group of Seven industralised countries (G-7) and 12 developing countries representing key emerging markets and the European Union.While Canada will be holding the G-20 chairmanship for the first two years, the host country - Germany is the current chairman of the G-7.The G-20 finance ministers and central bank governors, while discussing how improved financial sector regulation could help countries reduce their vulnerability to financial crisis, also examined the scope for cooperating with the fledgling financial stability forum. Finance Minister Yashwant Sinha is leading the Indian delegation.The forum established by the G-7 finance ministers and central bank governors in February this year is aimed at promoting international financial stability through enhanced information exchange and international cooperation in financial market supervision and surveillance.According to a Canadian official, the creation of the G-20 represented the next stage in the evolution of informal consultations among industrialised countries and emerging markets for enhancing global economic security. Canada is due to host the second G-20 meeting next year.Prudent debt management, exchange rate regimes and international codes and standards were among other key issues discussed by the G-20 finance ministers and central bank governors. The main mandate of the G-20 is to examine specific ways in which countries could respond through sound domestic policies to ward off the threat of any financial crisis to help achieve a more stable international financial system.The IMF and other bodies have already developed a number of codes and standards that set out "good practices" in the areas of policy transparency, data dissemination relating to fiscal and monetary policy and economic and financial data.
