Creation of a global financial regulator “neither practical nor desirable,” Conference Board says

Despite calls for a new financial order in the wake of a global economic recession, the creation of a global financial regulator is neither practical nor desirable, the Conference Board of Canada says.
The Conference Board makes a number of recommendations to avoid a recurrence of the current financial meltdown in its recent report, International Financial Policy Reform and Options for Canada: Think Globally, Act Locally.
Among them, “countries should accept responsibility for their regulatory and supervisory failures and work to address them,” it says.
Canada, it adds, “should not support calls for managing international capital flows. Instead, it should push for greater monitoring, data collection and analysis of capital flows by existing international organizations — principally, the IMF.”
Increased transparency is desirable in many areas, the Conference Board, notes, including securitizations. The report says securitization — which describes a situation in which financial instruments are bundled together and sold as packages of assets — is in need of rehabilitation. Securitized products such as credit default swaps are at the centre of American International Group (AIG)’s current financial difficulties.
“Governments and regulators should support measures to improve the transparency of risks being securitized and other measures to restore confidence in this important channel,” the report says.
An insurance industry compensation fund, similar to deposit insurance, “does make sense,” the board observes elsewhere in its report, “but access to emergency lending facilities by insurance companies in general does not.”