HSBC has called for the creation of a new set of principles and rules that promote international trade by increasing transparency and simplicity in the financial system, and proposed a forum to enable global businesses to engage with governments and regulators as this new marketplace is constructed.
The concept of the ‘Business 20’ (B20) forum, which has the support of UK government, is to mirror the G20 group of the worlds most influential economies in both the developed and the developing worlds. It will be comprised of the world’s largest companies, including those in the developing world, with a particular focus on businesses with international operations.
“This crisis is the worst I have seen in 25 years as a banker and possibly the worst since the 1930s,” says Stephen Green, HSBC Group chairman at the World Economic Forum at Davos. “Few reputations will escape this unscathed and there are lessons to be learned in this for all banks, financial institutions, governments, regulators and each of us as private consumers. For example, the current financial framework, though well intentioned, has proved inadequate and must be fundamentally revised. Fair value accounting has added considerable volatility to results, only part of which is economic, and the capital adequacy regime embodied in Basel 2 has hobbled many banks with spiralling capital requirements just when customers need them to be flexible with lending.
“We welcome this initiative from HSBC to get the world’s leading businesses to support the G20 and the steps being taken by governments around the world to tackle the current global economic challenges,” says Baronness Shriti Vadera, UK minister for competitiveness and small business.
HSBC believes that this new global marketplace needs to promote:
•Global cooperation: the adoption of the G20 as the principle forum for advancing international trade and economic stability
•Economic balance: a recognition that countries running persistent deficits must encourage consumers to save more and spend less while those in persistent surplus must be given the tools to encourage spending
•Transparency and simplicity: global accounting and regulation that provides investors with certainty and products that clients and institutions can easily understand
D.C.