Paris, 15 October 2008
OECD strongly welcomes the co-ordinated efforts of political leaders and their financial authorities to address issues of liquidity, solvency and recapitalisation of the financial system. Looking beyond crisis management, work should begin on sensible structural reform to reduce the risk of recurrence in the longer run.
The decisions announced in the last few days clearly point towards a gradual convergence around an agreed “menu” of policies, instruments and outcomes. “Reactive, piecemeal approaches have given way to a more organised, systemic process. This more focused, co-operative approach will be instrumental in re-establishing confidence in financial markets world-wide”, OECD Secretary-General Angel Gurría said.
“What is needed now is for markets to recover their normality, while avoiding excessive volatility,” Mr. Gurría added. “Effective execution of the measures announced will allow the resumption of lending to corporations and households, which is the way to get the economy going again.” The ultimate goal is to avoid a widespread and protracted global economic downturn and restore the conditions for growth. The stabilization and strengthening of the financial system is, in itself, a powerful counter-cyclical tool.
OECD Secretary-General Angel Gurría
On the other hand, efforts to restore growth will all have to be done in a tight fiscal context, where some of the financial rescue packages may put further pressure on public-sector balance sheets. Therefore, additional efforts to maintain fiscal soundness are required.
Mr. Gurría said the OECD will now focus on the structural implications of the financial crisis, including a more holistic culture of risk management, compensation issues and responsible and accountable management, as well as more effective regulation. “We will also make proposals for improved financial education and risk awareness to restore the confidence of consumers of financial services.”
In the area of corporate governance, implementation of agreed international standards, such as the OECD Principles of Corporate Governance, will need to be strengthened through better international co-operation and coherence between national frameworks.
The OECD, well known for its capacity to bring together governments, international organisations, business, trade unions and different stakeholders, is committed to helping the world return to a sustained growth path.
Statement by OECD Secretary-General to the International Monetary and Financial Committee
The Global Economy and OECD: Distilling Lessons from a Financial Crisis
Statement by the Secretary-General of the OECD, Mr. Angel Gurría, on the Financial Crisis and its Aftermath