Systemic risk in financial system is not yet under control, debate concludes

13 October 2010

A programme to control systemic risk is still to be implemented by the G20 meaning the ability of the industry to predict another financial crisis remains “a long way off”, an independent analyst has claimed.

The comments were made following a debate of financial professionals which voted by three to one that an effective solution to control systemic risk has yet to be introduced.

According to JWG, the outcome of the discussion shows that little work has been undertaken by the G20 to restructure regulations despite agreements it made in April 2009.

PJ Di Giammarino, chief executive officer of JWG and moderator of the debate, said: “It was clear that the supervisors are concerned about how to achieve the systemic risk aims prescribed by G20 politicians.

“As it stands they have nowhere near enough information to fulfil their remit and the models in use today have significant flaws.”

More than 40 attendees were at the debate held by the Financial Services Club, which included officials from the Bank of England and the Financial Services Authority.

By Jim Ottewill

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