West Palm Beach (HedgeCo.net) – G8 Finance Ministers announced their endorsement of a global regulatory framework for financial institutions worldwide, "We agreed to create a coherent framework which builds on work done by the IMF, World Bank, OECD, FSB, FATF, and other international organizations, to strengthen the global market system." the G8 said in a statement on Saturday.

"To ensure effectiveness, we will make every effort to pursue maximum country participation and swift and resolute implementation. We have agreed on the objectives of a strategy, "the Lecce Framework", to create a comprehensive framework, building on existing initiatives, to identify and fill regulatory gaps and foster the broad international consensus needed for rapid implementation."

The Lecce Framework recognizes that there is a wide range of instruments, both existing and under development, which have a common thread related to propriety, integrity and transparency and classifies them into five categories: corporate governance, market integrity, financial regulation and supervision, tax cooperation, and transparency of macroeconomic policy and data.

Specific issues covered include, inter alia, executive compensation, regulation of systemically important institutions, credit rating agencies, accounting standards, the cross-border exchange of information, bribery, tax havens, non-cooperative jurisdictions, money laundering and the financing of terrorism, and the quality and dissemination of economic and financial data. International institutions and fora have already developed a significant body of work addressing a number of important issues in these areas, but, in many cases, the initiatives suffer from insufficient country participation and/or commitment, the G8 said.

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Reuters – China, setting out its stall for the next global financial summit, wants the International Monetary Fund to get tougher with developed countries that let their economies run off the rails.

In a position paper prepared for the April 2 meeting in London of the Group of 20, China calls for more power for developing countries in the IMF and World Bank and issues a warning against investment protection.

On financial regulation, the memo says accounting standards and credit ratings should be adjusted to contain the "pro-cyclical" bias of financial institutions to ramp up lending and investment when times are good, leading to excessive risks.

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Tags: accounting standards, bias, china calls, developing-countries, excessive risks, financial summit, financial-institutions, imf, international monetary fund, investment protection, london, position paper, reuters, world bank