A big boost for business from pricing local risks: international standards for assessing country risk

RMA Journal, The, May, 2003 by George J. Vojta, Carl F. Adams

The Financial Standards Foundation emphasizes the urgency of compliance with global business standards and codes of good behavior as a primary requirement of the private market participants. Pricing the risks of country compliance with global architecture reality is a mandate for us all. The power of pricing will be a positive enforcement of country compliance for the benefit of the country's own population.

Welcome to the 21st century!

Appendix
Key Codes and Standards for Sound Financial Systems


                 Area

1   Monetary and Financial Policy
             Transparency

2     Fiscal Policy Transparency

3         Data Dissemination



                      Key Standards

1       Code of Good Practices on Transparency in
             Monetary and Financial Policies

2     Code of Good Practices in Fiscal Transparency

3       Special Data Dissemination Standard (SDDS)
       General Data Dissemination System (GDDS) (a)

                                        Dates
             Issuing Body             Formulated

1    International Monetary Fund         1999
                (IMF)

2                IMF

3                IMF                  1996/1997


Institutional and Market Infrastructure


                 Area

4   Insolvency and Creditor Rights


5        Corporate Governance

6             Accounting



7              Auditing


8        Payment & Settlement




9          Market Integrity




                      Key Standards

4    Principles & Guidelines for Effective Insolvency
           Regimes and Creditor Rights Systems

5           Principles of Corporate Governance

6         International Accounting Standards (b)



7       International Standards on Auditing (ISA)


8       Core Principles for Systemically Important
           Payment Systems/Recommendations for
              Securities Settlement Systems


9          The 40 FATF recommendations on money
          laundering & 8 special recommendaitons
                 on financing terrorism.

                                        Dates
             Isuing Body              Formulated

4            World Bank                  2001


5               OECD                     1999

6     International Accounting        Since 1974
     Standards Committee (IASC)
              (note c)

7    International Federation of
     Accountants (IFAC) (note c)

8      Committee on Payment &            2001
      Settlement Systems (CPSS)
    International Organization of
    Securities Commissions (OSCO)

9       Financial Action Task            1990
            Force (FATF)             (revised in
                                     1996 & 2001)

Financial Regulation and Supervision


                 Area

10       Banking Supervision

11      Securities Regulation

12      Insurance Supervision



                      Key Standards

10        Core Principles for Effective Banking

11  Objectives and Principles of Securities Regulation

12              Insurance Core Principles


                                        Dates
             Issuing Body             Formulated

10         Basel Committee               2001

11              OSCO                     1998

12    International Association          2000
    of Insurance Supervisors (IAIS)

Notes

(a) Economies with access to international capital markets are
encouraged to subscribe to SDDS; all other economies are encouraged to
adopt the GDDS.

(b) These standards are currently being reviewed by the IASC and IOSCO.

(c) IASC and IFAC are private-sector bodies.

Source: Financial Stability Forum