Prepared remarks by Mario Draghi, Chairman of the Financial Stability Forum at the conclusion of London Summit on 2 April 2009.
The objective of financial crisis management is to seek to prevent serious domestic or international financial instability that would have an adverse impact on the real
economy.
2 April 2009
These Principles aim to ensure effective governance of compensation, alignment of compensation with prudent risk taking and effective supervisory oversight and stakeholder engagement in compensation.
The recommendations cover the following areas: the bank capital framework, bank loan loss provisions, and leverage and valuation.
The principles in this document promote strong governance processes around valuations; the use of reliable inputs and diverse information sources; the articulation and communication of valuation uncertainty to internal and external stakeholders; the allocation of sufficient banking and supervisory resources to the valuation process; independent verification and validation processes; consistency in valuation practices for risk management and reporting purposes, where possible; and strong supervisory oversight around bank valuation practices.
This document includes high-level principles for cross-border cooperation on crisis management between relevant authorities.
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