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When the G20 met in Pittsburgh in the wake of the financial crisis, the focus was on remediation. To counter the shocks that the system had suffered, a mechanism was to be put in place to monitor counterparty risk exposure.
It had come as a shock to many, including (one suspects) regulators, that the extent of the potential problem was not identified before it emerged as a series of domino-like failures. In that rather sobering
environment, it is not surprising that there emerged a firm desire and commitment to ensure that such a situation should never arise again and that transparency should be brought to the markets.
Much of the groundwork had been laid in earlier summits; indeed, when one reads the Pittsburgh communiqué with the benefit of hindsight it is clear that in the collective minds of the G20, the focus had already switched from design to implementation. As a whole, the measures foreseen by the G20 articulate well into a coherent and
They create transparency and traceability through a hierarchy of identification, and implement practical measures for each subject to use that transparency for practical purposes. In practical terms, the G20 agreed on the principles and then left the trading ‘blocs’ concerned, the USA and the EU being those amongst the first to act,
to determine and enact legislation allowing the detailed requirements to be implemented.
Inside magazine issue 4, March 2014
Inside is Deloitte’s quarterly magazine offering an exclusive insight into best practices, trends and opportunities faced by our clients across all industries.
Inside focuses on the main hot topics relevant for the market (Asset management, Banking, Insurance, Public sector, Healthcare, Private equity, Real estate, TMT, Manufacturing and consumer business, Transport and logistics).