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This overview paper examines the financial crisis in light of past country experience and economic theory and sets out some preliminary policy recommendations.
OECD Secretary-General Angel Gurría has welcomed the decision by G7 Finance Ministers to work towards setting up a set of common principles on integrity, transparency and propriety in global financial and business transactions.
Experts from the IMF, the OECD, and the World Bank met on 4 February in Paris to exchange views and co ordinate responses to the global economic crisis.
In his remarks delivered in Rome, Angel Gurría has welcomed the decision by G7 Finance Ministers to work towards setting up a set of common principles on integrity, transparency and propriety in global financial and business transactions.
Private Pensions Outlook 2008 focuses on the implications for pensions and private pensions policy of the financial crisis, in-depth, international analyses of private pension arrangements across OECD and selected non-OECD countries, the role of pension funds and public pension reserve funds which complement the financing of social security systems.
According to the new OECD Private Pensions Outlook workers are rightly worried about the fall in the value of the private pension savings and there is growing pressure on governments to act. The OECD estimates that the loss in private pension assets in the year to December 2008 has increased to US$ 5.4 trillion, up from US$ 5 trillion until October. The average pension fund had a negative rate of return of 23 percent over the year.
The crisis exposed weaknesses in the Hungarian financial system that pose risks to financial stability. A major lesson learnt from the crisis is that the approach to household lending should change: a stronger protection of borrowers should be combined with a tighter regulation of lenders.
At a meeting with Slovak Economists, Mr. Gurría underlined that the OECD has developed a strategic response to deal with the current situation, while at the same time addressing the interaction between different policy actions in our economies.
Policy makers are now facing the challenge of providing a short-term response to the crisis without losing sight of the longer-term structural reforms needed to put pension and healthcare systems on a solid footing in light of population ageing. According to Mr. Gurría, we need pension funds to be more transparent and better regulated but we also need structural reforms in the public pension policies and health care systems.
According to Mr. Gurría, the crisis has led to some major new thinking, about regulation and markets, about accountability and ethics, and about the kind of economy we need to build. Our strategy is about devising better policies, better regulations and better institutional frameworks that enable businesses to flourish and public interests to be safeguarded in a stronger, cleaner and fairer world economy.