Call for global regulatory approach

The chairperson of the main New Zealand financial services regulator, the New Zealand Securities Commission, Jane Diplock has called for a global regulatory approach to address the issues underlying the current market meltdown.

Diplock, who formerly worked in the upper echelons of the Australian Securities and Investments Commission, is also chairperson of the International Organisation of Securities Commissions (IOSCO) and argued it is that body that should have carriage of developing the global regulatory approach.

Diplock told the Association of Superannuation Funds of Australia national conference in Auckland, New Zealand that now that national financial services regulators had taken urgent action to address the repercussions of the global meltdown it was time to adopt a global approach aimed at addressing the underlying issues.

What is more, the New Zealand regulatory chief said that the consequences for global financial markets might have been much worse if sophisticated regulatory regimes had not already been in place.

“The actions that we take today will have repercussions for years to come,” Diplock said. “And I believe we have the capacity to invent the future of securities market regulation.

“But we need to understand that the rescue packages put in place by governments throughout the world would not have been contemplated without the existing regulatory underpinnings,” she said.

Diplock said that the existing regulatory structures and the measures put in place by governments may have served to address the banking crisis, but that there needed to greater examination of the causes of the crisis.

“The mischief occurred in the conduct sector of the markets,” she said.

Diplock suggested that, under the auspices of IOSCO, national regulators could put in place a “virtual” super regulatory regime based on mutual recognition agreements throughout the world with a common basis of principles to assess its effectiveness.