BASEL – The importance of good corporate governance in maintaining public trust and confidence in banking systems was forcefully underscored in mid-February by the Basel Committee, which effectively sets standards for banks around the world. In a new paper setting out eight key principles of corporate governance, the Committee says that this topic is sufficiently important for the health of the international financial system that it merits targeted supervisory guidance.

HONG KONG – China\'s Special Administrative Region (SAR) is well advanced on the policy framework for implementing the Basel II bank capital rules from January 2007, Hong Kong Monetary Authority (HKMA) deputy chief executive William Ryback said in late January.

BASEL, Switzerland - Insurance supervisors issued a roadmap in February for the development of international standards on the assessment of insurer solvency. The plan extends over many years. The roadmap has been drawn up by the International Association of Insurance Supervisors (IAIS). The IAIS is the Basel-based umbrella body that groups insurance supervisors from some 180 jurisdictions with the aim of promoting international standards for the insurance industry.

BASEL, Switzerland – Global banking regulators have set up a working group on clearing and settlement arrangements for over-the-counter (OTC) derivative contracts with the aim of completing a final report in the first-half of 2007.

A deal between EU lawmakers and the Commission looks like removing a threat to efficient financial regulation in Europe.

The European Commission has set up a new expert group with the aim of ensuring it gets balanced advice on accounting standards.

Global forces bolster case for federal regulation International competition in the insurance market is increasing the pressure for reform of America\'s insurance rules.

Plans for a third test of Europe’s Solvency II insurance proposals shouldn’t hold up the draft framework directive, but the project’s timetable remains ambitious.

Discretionary benefits provided by insurance policies should be treated as liabilities in insurer accounting statements, based on expected cash flows, the International Association of Insurance Supervisors (IAIS) believes. Treating such liabilities as equity, as suggested by the International Accounting Standards Board (IASB), would misrepresent the financial position.

Insurance products with a high volatility of technical provisions and high run-off margin – most liability products, for instance – may increase in price or have to be redesigned if regulators require market-consistent valuation of reserves, according to a Solvency II study by the world’s largest reinsurance group*.