NEW MARKET STRUCTURE AND ACTORS

New risks in international capital markets-implications for financial regulation
Professor Avinash Persaud
Gresham College

What will be the dominant trends driving change in the money and capital markets in the next two to five years? What are the implications of continuing weakness in world equity markets? How will the new Basel capital rules affect the international macroeconomy over the coming years? This session sets the scene for those that follow by exploring the changing financial landscape in international capital markets, in particular examining likely developments within (a) OECD countries (b) middle- and high-income emerging markets and (c) low-income countries.

How supervisors can manage national and international challenges
Roundtable discussion led by Dr Kern Alexander
Judge Institute, Cambridge University

What are the key challenges currently confronting supervisors in their home institutions and jurisdictions? This session aims to provide an international perspective on the most pressing supervisory issues and developments. Delegates will each give a short introduction of themselves, and speak briefly on their main challenges and their experiences in tackling them. Through discussion and debate, delegates will have an opportunity to benefit from each other's expertise and experience.

Preventing financial sector disruption
John Trundle
Head of Market Infrastructure Division, Bank of England

Central banks and regulatory agencies have become increasingly aware of the importance of careful and robust continuity planning for financial sector emergencies from whatever source. The Bank of England takes a lead role in preparing and safeguarding the smooth running of the City in the event of major operational disruption. John Trundle, who heads the bank's market infrastructure division, explains the bank's approach.

Fighting money laundering and the financing of terrorism has become a critical concern for financial supervisors. The recently-announced revision of the FATF 40 recommendations sets the international benchmark even higher. Claes Norgen, the FATF president who will oversee the new standards' implementation, here details what financial supervisors must understand about the new rules.

Practical issues in IMF Financial Sector Assessment
Udaibir S. Das
Deputy Chief in the Financial System Surveillance Division, IMF

For the last four years, the IMF has been developing its Financial Sector Assessment Programme (FSAP) designed to identify financial sector weaknesses in member countries' economies. This process is already having a substantial effect on the practice of supervision in countries around the world. As experience on the ground accumulates the programme evolves, and this session draws out the key lessons from this four-year experiment. It also details how the Fund and national supervisors can best approach ongoing work.

BASEL II AND BANKING SUPERVISION

The emerging world of financial services liberalisation under the GATS - what it means for supervisors
Juan Marchetti
World Trade Organisation

The WTO General Agreement on Trade in Services (GATS), the first multilateral trade agreement to promote the liberalisation of financial and other services, is an important new element in the international framework applicable to the regulation of the financial sector. In November 2001, WTO ministers meeting in Doha (Qatar) decided to launch a broader round of trade talks, and gave new impetus to the negotiations on trade in services. This raises numerous critical issues for financial supervisors. Liberalisation can weaken domestic financial services firms and possibly undermine prudential controls and financial stability. This presentation updates delegates on progress and explores the likely impact of any negotiated deal.

Practical problems in implementing Basel II – new judgements, new skills, new staff
Charles Freeland
Deputy Secretary General of the Basel Committee

The proposed revision to the Basel capital accord will radically alter banking supervision around the world. With the new rules nearly finalised, this presentation details the key features of the new accord, in particular focusing on the latest changes incorporated in the recently-issued third consultation paper. What are the key new skills demanded of supervisors, and how can they develop them?

Exploring the implications of Basel II for supervisors
----------Panel discussion----------
Charles Freeland, Professor Geoffrey Wood, Dr Kern Alexander

With the release of the Basel Committee's third consultative paper on the new Basel capital accord, the final shape of the new structure is now apparent. Implications for banks have been extensively tested in the committee's quantitative impact studies. However, what are the implications for supervisors who will have to implement the new rules? This group discussion aims to explore some of the different options available, and consider the impact of each for central bankers and financial supervisors in both developed and emerging markets.

Reconciling financial stability with the lender-of-last-resort function
Professor Geoffrey Wood
Cass Business School

Central banks face no more controversial decisions than those involving their lender-of-last-resort role. Because decisions to provide emergency liquidity to the banking sector are frequently made in times of crisis, it is critical that central banks and supervisors have well-thought-out legal and operational contingency plans. This session examines the impact of LOLR on the central bank's core functions and on its critical responsibility to deliver financial stability.

A guide to cost-benefit analysis in rule-making
Isaac Alfon
Central Policy Unit, UK Financial Services Authority

One way for supervisors to demonstrate that they are acting in a proportionate manner is to perform cost-benefit analyses of proposed rule-making. More and more, this is becoming a statutory requirement as it is for the UK Financial Services Authority on whose experiences this session draws.tral Policy Unit, UK Financial Services Authority