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transparency in consultation and the privilege of trade association membership May 6, 2010

Posted by Bradley in : consultation , trackback

If a standard-setter publishes responses to its consultative documents online, as the EU does, and the BIS has, for example on Strengthening the resilience of the banking sector and International framework for liquidity risk measurement, standards and monitoring, why would the writer of a response locate the same document on its own web pages behind its membership wall? The Loan Market Association’s comments are available for all to view on the BIS website, and from the EU Commission’s consultation pages, but its own website states:

The LMA has responded to the European Commission’s consultation on reforming the Capital Requirements Directive (CRD4) and the Bank of International Settlements’ consultative document — ‘Strengthening the resilience of the banking sector ‘.
The LMA welcomes these papers as constructive approaches to macro and micro-prudential risk management and the creation of a more resilient financial sector. To read the LMA’s response, which outlines the issues that the LMA feels should be considered, please logon to the Members’ Area and select Market Information/Regulation/Submission to Regulators.

In fact, the content of the responses is visible in the LMA press release. And in any case, it’s not as if there’s anything very surprising in the LMA’s comments, except perhaps that the comments to both bodies are basically the same, including this paragraph which seems more appropriately directed to a regional body like the Commission than to a global body like the BIS (though given the US attitude to implementation of Basel II perhaps not):

…it is important, given the global nature and interconnectivity of financial markets, that coordination with other regulators, supervisors and governing bodies is undertaken at both the development and implementation stages, so as to ensure clarity of message and avoid any risk of ‘regulatory arbitrage’. Policy should be aligned with other regions, particularly the United States of America.

But if it’s about making the LMA members feel they are getting more for their membership contributions than the lobbying itself, perhaps we should be getting (more) worried about the loan market?


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