Recommendations by the Issing Commission - Memo for the G-20 Summit in Seoul

White Paper No. 23, 2010

Authors:
Otmar Issing,
Jan Pieter Krahnen,
Klaus Regling,
William White
Research Area:
Financial Intermediation
Date:
Nov 2010
Keywords:
Basel III, systemic risk, liquidity support
Abstract:

We see four key policy measures necessary to achieve a more resilient and stable financial system: (1) De-risking individual financial institutions (increasing capital requirements under Basle III); (2) Imposing bail-in (as opposed to bail-out) for debt and equity holders; (3) De-risking the financial system by limiting the extent of systemic risk (creating a systemic risk charge together with an oversight body); and (4) De-risking the trading of securities and derivatives, by requiring financial institutions to use central counterparties (CCP) in these markets.

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