Emily Vogl, Frank Vogl
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Jacques de LarosiÃ¨re and David Dodge to Lead Global Market Monitoring Group to Assess Financial Market Risks and Promote Systemic Stability
Institute of International Finance to serve as Secretariat for the Market Monitoring Group
Washington D.C., March 13, 2009 — Mr. Jacques de LarosiÃ¨re, former Managing Director of the International Monetary Fund and former Governor of the Banque de France, and Dr. David A. Dodge, former Governor of the Bank of Canada, will co-chair a "Market Monitoring Group" (MMG) to enhance financial stability and help prevent future crises by identifying and assessing systemic risks and suggesting ways to mitigate these risks.
Dr. Josef Ackermann, Chairman of the Board of Directors of the Institute of International Finance (IIF), Chairman of the Management Board and the Group Executive Committee of Deutsche Bank AG, said, "The crisis has revealed the serious need for the financial services industry itself to have a process in place that looks ahead at potential systemic risks and can, as appropriate, issue clear messages and suggest measures to reduce the identified risks. The MMG, which has been established by the IIF's Board of Directors, is expected to play a critical role in contributing to greater responsibility."
Dr. Ackermann noted, "We are most fortunate to have such distinguished leaders as Jacques de LarosiÃ¨re and David Dodge chairing the new MMG. The stature and experience of the founding membership of the MMG attests to the importance that our industry attaches to this initiative, which is unique in being driven by leaders in international finance and experienced practitioners. The MMG is expected to develop perspectives that will be shared widely with market participants. The MMG will also be open to dialogue with public sector groups and institutions as part of the global effort to enhance our collective capacity to detect and avert systemic crises."
The IIF, the leading global association of financial services institutions, will serve as the MMG's secretariat.
IIF Managing Director Charles Dallara noted that, "The global system needs a better means of detecting systemic risks at an early stage and focusing the world on these risks. The MMG will serve as an early warning system and can make an important contribution in this respect and in so doing it will contribute to the strengthening of the financial system's architecture. The MMG's monitoring of vulnerabilities will focus on risks which have systemic implications, for example a widespread incidence of liquidity and concentration risk, mispricing of risk, excessive leverage, crowded trades, global counterparty risk due to interconnectedness of markets, and the potential for contagion across markets and regions."
Mr. Dallara added, "Looking back at the origins of today's crisis there is no doubt that many financial institutions underestimated the scale of risks and the potential scope of the threats to the stability of the financial system. Indeed, recent years have seen too strong a focus on short-term opportunities. It is essential now, as we look to sustaining a more stable and efficient financial system in the future, that we strengthen efforts to understand the medium-term implications of current trends in international finance with particular emphasis on prospective systemic vulnerabilities."
Emily Vogl, Frank Vogl