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China, India, Brazil join inner regulatory circle

(Agencies)
Updated: 2009-02-20 11:45

China, India and Brazil have joined the inner circle of a top global financial regulation forum on Thursday as part of wider efforts by policymakers to formally recognise the three countries' growing economic clout.

The International Organisation of Securities Commissions (IOSCO) groups watchdogs from over 100 countries representing more than 90 percent of the world's securities markets.

But the key standards-devising work is done by its technical committee of just 15 members, including the United States, Japan, Germany, France and Britain.

It has left out watchdogs from countries such as China, now the world's third biggest economy and with a fast growing financial market.

"The changing landscape of the international financial system in this time of crisis demands that organizations, such as ours, reflect such changes in the composition of its membership," said Kathleen Casey, chairman of the technical committee and a commissioner at the US Securities and Exchange Commission.

IOSCO's move mirrors broader trends as the ability of just a handful of countries to determine global financial rules is increasingly seen as untenable.

Global leaders have agreed to draw regulatory lessons from the credit crunch via the Group of Twenty (G20) countries so that nations like China, Brazil and India have a say.

The Financial Stability Forum (FSF), a body aimed at ensuring market stability, is made up of government and central bank officials from 12 countries and several financial institutions, is expected to be expanded.

Haggling over which new countries may join the FSF continues behind the scenes and some observers expect China, Brazil and India to be given a seat.

The G20 holds a summit on April 2 in London to agree on a more detailed set of actions to reform financial market regulation and oversight.