Financial Stability Forum Names New Head

Financial Stability Forum Names New Head
By Martin de Sa'Pinto, Senior Financial Correspondent

BASEL, Switzerland (HedgeWorld.com) - Financial Stability Forum members have designated Mario Draghi as chairman of the FSF when Roger Ferguson Jr., vice president of the U.S. Federal Reserve, steps down at the end of this month. G7 Finance Ministers and central bank governors have confirmed their support for Mr. Draghi's nomination.

The FSF was set up in February 1999 to promote international cooperation in financial supervision and surveillance, and to enhance international financial stability by fostering the exchange of information across borders. It brings together committees of central bank experts, regulatory and supervisory authorities and international financial institutions, as well as senior finance officials from the G7 countries, Australia, the Netherlands, Hong Kong and Singapore.

It is Mr. Draghi's second high-profile appointment within a matter of months; he stepped in as governor of the Bank of Italy at the end of December 2005, replacing the controversy-prone Antonio Fazio, whose role in Banca Popolare Italiana's failed takeover of Banca Antonveneta is still being investigated by the Italian authorities. Already a well respected figure in both financial and political circles, Mr. Draghi's appointment as Bank of Italy governor brought to a close a situation that had turned from a minor scandal into a full-blown institutional crisis.

Mr. Draghi chaired the commission which drafted the 1998 law governing the Italian financial markets, effectively bringing corporate communications in Italy into the 20th century, with disclosure rules and shareholder protection legislation to match that of any advanced economy. But enforcement in Italy has remained weak, with companies and investors that flout the rules rarely subjected to anything more than token sanctions.

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