In addition and as a complement to re regulation, we need a comprehensive systemic risk monitor.

But, prior to both Japan s nuclear crisis and the financial crisis, regulators were unable to prevent the risk.

Tailor made derivatives would have to be registered individually, with regulators obliged to understand the risks involved.

A wider range of risk mitigation products should be developed and scaled up, focusing on the twin concerns of regulatory and foreign exchange risk.

The accelerating speed of innovation seems to be outstripping government regulators capacity to deal with risks, much less anticipate them.

Pitfalls

Some of the ideas discussed during the consultations include suggestions for mechanisms to mitigate regulatory risk to increase the role of the World Bank and regional development banks in risk mitigation through increasing the leverage for their guarantees and to strengthen local currency lending.

AGENDAS OF THE ORGANIZATIONAL AND RESUMED ORGANIZATIONAL SESSIONS,

Organizational arrangements

Provisional agenda and annotations

Election of officers

Decisions adopted by the Executive Board in 2005

Organizational effectiveness

The Committee considered the item.

1 P 5, 6 P 4,

A. Convening of the Expert Meeting

(b) Social development

Organizational Unit

I. ORGANIZATIONAL ARRANGEMENTS . 5 11 2

A. Organizational constraints . 78 20

Management Services

Now financial risks are deemed to be sufficiently important for macroeconomic management to warrant regulatory arrangements going beyond that of the microprudential supervisor.

The lesson for regulators is simple capacity for risk is related to the maturity of funding, not to what an institution is called.

So what are the risks?

The Risk Tsunami

Risks

Hazard pay

(United States dollars)

The risk is immense.

Regulators, recognizing the risks of allowing financial deglobalization to accelerate, have been seeking better means of handling the failure of huge global banks.

It will be the task of regulators to understand derivatives and synthetic securities, and to refuse to allow their creation if they cannot fully evaluate the systemic risks.

2. Organizational matters.

Organizing Committee

Organizational issues

Previous regulations

Organizational matters

Regulatory issues

(a) Organizational effectiveness

C. Organizational effectiveness

Organizational matters Overview of the sessional period

He will also serve as President of COP MOP 1.

Organizational and procedural decisions

Reports of the subsidiary bodies and decisions and conclusions arising therefrom

(d) Narcotic drugs

Following the proposal of the President, the COP adopted the agenda as follows