More than a decade ago, a bunch of banks thought it would be a good idea to make some plans for … cooperation. Recent events have … enhanced cooperation.

RTFA: http://www.fsforum.org/about/history.htm

On October 3, 1998, the Finance Ministers and Central Bank Governors of the G7 countries commissioned Dr Hans Tietmeyer, President of the Deutsche Bundesbank, to recommend new structures for enhancing co-operation among the various national and international supervisory bodies and international financial institutions so as to promote stability in the international financial system.

G7 Ministers and Governors reinforced their commitment to reforms to the international financial system and financial stability in a declaration issued on 30 October 1998. He recommended the creation of a Financial Stability Forum.

Dr Tietmeyer presented his report to G7 Ministers and Governors at the meeting in Bonn on 20 February 1999 and G7 Ministers and Central Bank Governors endorsed the creation of a Financial Stability Forum (FSF) bringing together:

*
national authorities responsible for financial stability in significant international financial centres, namely treasuries, central banks, and supervisory agencies;

*
sector-specific international groupings of regulators and supervisors engaged in developing standards and codes of good practice;international financial institutions charged with surveillance of domestic and international financial systems and monitoring and fostering implementation of standard;

*
committees of central bank experts concerned with market infrastructure and functioning.

The FSF was first convened on 14 April 1999 in Washington. Mr Andrew Crockett, General Manager of the Bank for International Settlements, was appointed Chairman of the FSF in a personal capacity.

Here’s a smidgen of extra information from Wikipedia:

The Financial Stability Forum is a group consisting of major national financial authorities such as finance ministries, central bankers, and international financial bodies. The Forum was founded in 1999 to promote international financial stability. Its founding resulted from discussions among Finance Ministers and Central Bank Governors of the G7 countries, and a study which they commissioned.[1]

The Forum facilitates discussion and co-operation in supervision and surveillance of financial institutions, transactions and events. FSF is managed by a small secretariat housed at the Bank for International Settlements in Basel, Switzerland.[2] It is chaired by Mario Draghi, an Italian banker and economist who became the governor of the Bank of Italy in January 2006 for a six-year term.

The FSF membership includes about a dozen nations who participate through their central banks, financial ministries and departments, and securities regulators, including (in descending economic size): the United States, Japan, Germany, the United Kingdom, France, Italy, Canada, Australia, the Netherlands and some other industrialized economies.[3] It also includes several international economic organizations. [4] At the G20 summit on 15 November 2008 it was agreed that the membership of the FSF will be expanded to include emerging economies, such as China.

I’m sure you’d like to know more, but so would I.

RTFA: http://www.google.com/hostednews/afp/article/ALeqM…

World leaders agreed at an economic crisis summit Saturday to an action plan for reforming the financial system and promised to work together to restore global growth, according to a final communique.

“We are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems,” the final statement from the G20 group of countries said.

The statement committed the leaders, whose countries account for 85 percent of the world economy, to fiscal measures to boost national economies and laid out a series of areas for review before a deadline of March 31.

Six areas will be targeted: regulating those areas of the financial markets which have exacerbated the crisis, boosting transparency in the often murky derivatives markets and reforming compensation practices.

The ministers must also evaluate global accounting norms and the financing needs of international financial institutions.

Finally, they must draw up a list of financial institutions whose collapse would imperil the global financial system .

Okay – the US Dollar is intact. However, what are we to make of that final line: “financial institutions whose collapse would imperil the global financial system?” Watch out for more to precipitate out of that one.

RTFA: http://www.fsforum.org/about/history.htm

On October 3, 1998, the Finance Ministers and Central Bank Governors of the G7 countries commissioned Dr Hans Tietmeyer, President of the Deutsche Bundesbank, to recommend new structures for enhancing co-operation among the various national and international supervisory bodies and international financial institutions so as to promote stability in the international financial system.

G7 Ministers and Governors reinforced their commitment to reforms to the international financial system and financial stability in a declaration issued on 30 October 1998. He recommended the creation of a Financial Stability Forum.

Dr Tietmeyer presented his report to G7 Ministers and Governors at the meeting in Bonn on 20 February 1999 and G7 Ministers and Central Bank Governors endorsed the creation of a Financial Stability Forum (FSF) bringing together:

*
national authorities responsible for financial stability in significant international financial centres, namely treasuries, central banks, and supervisory agencies;

*
sector-specific international groupings of regulators and supervisors engaged in developing standards and codes of good practice;international financial institutions charged with surveillance of domestic and international financial systems and monitoring and fostering implementation of standard;

*
committees of central bank experts concerned with market infrastructure and functioning.

The FSF was first convened on 14 April 1999 in Washington. Mr Andrew Crockett, General Manager of the Bank for International Settlements, was appointed Chairman of the FSF in a personal capacity.

RTFA is going to present a brief series of posts concerning the G20 financial meeting that some are calling “Bretton Woods II”. We start with a little bit of history about the Financial Stability Forum, who have a stake in the meeting: they stand to gain a more significant leadership role in global markets.

RTFA: http://www.eurodad.org/whatsnew/articles.aspx?id=3…

German Chancellor Angela Merkel and French President Nicolas Sarkozy said “Bretton Woods II” should bring about “genuine, all-encompassing reform of the international financial system”. The Council of the European Union sees the meeting as “tak[ing] early decisions on transparency, global standards of regulation, cross-border supervision and crisis management, to avoid conflicts of interest and to create an early warning system, so as to engender confidence among savers and investors in every country.” In announcing the meeting, the spokesperson for US President George Bush said that “leaders will review progress being made to address the current financial crisis, advance a common understanding of its causes, and, in order to avoid a repetition, agree on a common set of principles for reform of the regulatory and institutional regimes for the world’s financial sector”. UK Prime Minister Gordon Brown, in a mid-October speech, set out several principles. These include transparency (internationally agreed accounting standards, credit insurance market standards), integrity (credit agencies, executive pay), responsibility (board member competency and expertise), sound banking practice (protecting against speculative bubbles).

For the new international architecture Brown and others are discussing an effective global early warning system for risk prevention, globally accepted standards to supervise cross-border capital flows and the activities of global firms, plus stronger institutions for cooperative action in crises. For CSOs it will be important that equity as well as stability is discussed at the conference and that fairer rules are developed for aid, debt, trade, investment, taxation and capital flight. The governance of the international financial institutions must be radically changed, fair debt workout mechanisms introduced, and much more.

Now that the election is behind us, on to new tasks… A very prominent, timely question: what will be the composition of the next global reserve currency? The US Dollar has enjoyed this position for some time, but the Dollar is in some trouble. What is the solution? That will be decided on November 15, 2008.

I’ve been calling this Bretton Woods III according to the following progression:

BW I was the agreement of world gold exchange
BW II was the agreement of the dollar reserve currency
BW III will be the establishment of a new model for global currency exchange

It seems this will be called Bretton Woods II for some reason, but no matter. The end result is a third round of negotiations for global reserve currency policy. What will this look like?