A Step in the Right Direction

Last week, the U.S. Chamber of Commerce published a declaration of their regulatory reform principles for consideration by the Obama Administration and the U.S. Congress.  Among other things, the declaration calls for greater transparency within the regulated entities as well as the regulatory authorities.  Here are their views.

Important elements for improving transparency and market integrity include:

1. Fostering information flow among all significant financial institutions and credible, effective regulators;


2. Enhanced risk management practices and disclosure thereof within regulated entities;


3. Improved and timelier risk modeling, particularly in times of stress;


4. Improved timely cross-border and cross-institutional information sharing among regulators; and


5. Oversight of credit rating agencies that promotes greater transparency, adherence to best practices, and initiatives to minimize conflicts of interest. Improved self-regulation should be supplemented by responsible and more internationally consistent government regulation of the industry.

As stated in previous blog posts, a crisis such as the one we are currently experiencing can lead to positive change.  These principles set forth in this declaration are certainly a step in the right direction.