A release from STEP points out that under an OECD initiative there are already well over 300 tax information exchange agreements (TIEAs) in place between countries and the number is growing rapidly. The report highlights the increasing risk that, as the TIEA network grows, countries with poor human rights records and weak data security will gain access to detailed personal financial data on individuals. “This could leave law abiding taxpayers and their families vulnerable to issues such as threats from criminal gangs who have gained access to tax data,” according to STEP.

David Harvey, STEP Chief Executive, said: “Most TIEAs so far have been agreed between major economies, such as the UK, and other well run countries. There is now strong political pressure to expand the list of countries accessing tax data via TIEAs, bringing in countries where it is harder to be confident that personal tax data will be secure. It is very worrying, therefore, that so far there are no clear plans to ensure minimum standards are in place to protect the public. It seems extraordinary, for example, that the current OECD review process for TIEAs only looks at a country’s performance in providing tax data. There is no check whatsoever to ensure countries receiving data on taxpayers’ financial affairs protect that data and respect personal confidentiality.”

STEP has proposed a set of minimum standards that countries must meet before getting access to tax data from other countries, including minimum standards of good governance, basic data protection measures and a right of redress for taxpayers if things go wrong.

UNCTAD notes that the global financial and economic recovery remains fragile, threatened by emerging risks, constraints in public investment and other factors. For the recovery to remain on track, private investment is crucial for stimulating growth and employment. Foreign direct investment (FDI) has a major role to play. WIR 2010 highlights a promising outlook: after a significant global FDI downturn in 2009, flows worldwide are expected to recover slightly this year, with a stronger recovery in 2011 and 2012. Overall, countries continue to liberalize and promote foreign investment, although there has also been an increase in new policy measures regulating foreign investment. Countries remain receptive towards FDI, seeing it as an important external source of development finance.

The WIR's special topic this year deals with the investment prospects for low-carbon economic growth and contends, among other things, that transnational corporations can play a major role in helping the world's poorer countries "jump-start" growth in this promising sector. Specifically, the report proposes a global partnership to synergize investment promotion and climate change mitigation and to galvanize low-carbon investment for sustainable growth and development. The five major components of the proposed partnership are: establishing clean-investment promotion strategies; enabling the dissemination of clean technology; securing international investment agreements’ contribution to climate change mitigation; harmonizing corporate greenhouse gas (GHG) emissions disclosure; and setting up an international low-carbon technical assistance center (L-TAC).

Established in 1964, UNCTAD promotes the development-friendly integration of developing countries into the world economy. UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development, with a particular focus on ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development.

The World Investment Report has been published annually since 1991. Each year´s Report covers the latest trends in foreign direct investment around the World and analyses in depth one selected topic related to foreign direct investment and development.

"This growth rate is higher than expected, but economic performance in the region is very diverse. What stands out are the members of Mercosur and countries with greater capacity to implement public policies, as well as those with strong domestic markets spurred by regional activity and their exports to Asia," stated ECLAC Executive Secretary Alicia Bárcena during the launching of the Economic Survey of Latin America and the Caribbean 2009-2010 Report in the Commission headquarters in Santiago.

The swift economic recovery following a crisis of proportions rarely experienced in modern economic history has been driven largely by public policies, says ECLAC. The macroeconomic soundness observed in most countries of Latin America and the Caribbean in the years preceding the global crisis made a significant difference. Governments made the most of a period of exceptional international economic and financial boom to straighten their public accounts, reduce and improve the profile of their debts and increase their international reserves. This process allowed them to apply countercyclical public policies that contributed to economic recovery starting the second half of 2009. Fiscal and monetary stimulation programmes, receding uncertainty, the relative normalization of financial markets, greater access to loans and a more dynamic world economy led to a gradual recovery throughout the year, with this process consolidating in 2010.

Prospects for 2011

Although recovery has been relatively quick, lingering questions and doubts regarding the evolution of the global economy may dampen the regional outlook in the medium-term.

The economic crisis in some European countries may have negative consequences on the volume and price of regional exports, as well as in the amount of remittances to Latin America and the Caribbean. There is also concern about some highly-indebted Caribbean economies, which are already in a situation of great vulnerability.

Growth is expected to slow down around the second half of 2010. Although the region will continue to expand in 2011, it will do so at only 3.8% approximately - equivalent to a 2.6% increase in per capita GDP.

ECLAC calls on countries in the region to maintain public policies geared at protecting the most vulnerable as part of a broader strategy that encompasses not only social areas but also macroeconomic and production policies.

Differences in performance

As always, these world growth rates hide a large difference between and within advanced and emerging and developing economies, with the United States expected to grow at about 3 ¼ percent in 2010, the euro area at 1 percent, Japan at close to 2 ½ percent, and emerging and developing economies averaging about 6 ¾ percent.

Also, the overall numbers do not reveal an important difference between the first and the second half of this year. For advanced countries for example, growth in the first half is forecast to be 3 percent, while growth in the second half of the year is forecast to be only 2 percent, reflecting a slowdown in private demand growth, Blanchard pointed out.

Mr. Viñals--speaking to journalists at a press conference hosted by the Hong Kong Monetary Authority on the 56th floor of the International Finance Center overlooking the spectacular Hong Kong harbor--emphasized that “progress toward global financial stability has recently experienced a setback.” Sovereign risks have materialized in parts of Europe, especially Greece, that have eroded confidence in the soundness of banks in some euro area countries, resulting in an increase in funding and liquidity stress in interbank markets because banks are less willing to lend of each other.

Spotlight on policy implementation

In its market update to the GFSR, the IMF points to restoring progress toward financial stability to contain the risks and keep the economic recovery on track. Rapid implementation of stabilization measures taken by the euro area government authorities will be a key component in calming financial markets. More generally, government policies in advanced economies should focus on credible fiscal consolidation—notably measures to enhance medium-run growth prospects, such as reforms to entitlement and tax systems.

“Supported by accommodative monetary conditions, fiscal actions should be complemented by financial sector reform and structural reforms to enhance growth and competitiveness,” the WEO update said. “Policies in emerging economies should also help rebalance global demand, including through structural reforms and, in some cases, greater exchange rate flexibility.”

“While we remain cautiously optimistic about the pace of recovery, there are clearly dangers ahead,” said Blanchard. “How Europe deals with fiscal and financial problems, how advanced countries proceed with fiscal consolidation, and how emerging market countries rebalance their economies, will determine the outcome."

The eight new principles cover specific policy areas such as hedge funds, credit rating agencies and auditor independence and oversight, in addition to broader areas including monitoring, mitigating and managing systemic risk; regularly reviewing the perimeter of regulation; and requiring that conflicts of interest and misalignment of incentives are avoided, eliminated, disclosed or otherwise managed. The Principles, which are an agreed set of high-level global standards outline the basis of an appropriate, effective and robust securities regulatory system, therefore their proper implementation by securities regulators is critical to the creation and maintenance of a sound global regulatory system. The Principles also play an important role in promoting a sound global financial regulatory system through their use by the International Monetary Fund (IMF) and World Bank assessors in the performance of the securities sector element of country Financial Sector Assessment Programs.

Jane Diplock, Chairman of the Executive Committee, said: “The global spotlight is focused on financial regulation, its form and function and regulatory outcomes, as the world strives to emerge from the greatest financial crisis in recent times it is challenging regulators to provide cogent answers. In our IOSCO meetings this week we have risen to that challenge and accomplished a significant reform of the basis for global securities regulation.”

She continued, “We have achieved this through the formulation of eight new principles of securities regulation which are to be implemented globally including, very importantly, two principles addressing systemic risk in markets. Where traditional economic orthodoxy has considered systemic risk to be only a matter for prudential regulators, the financial crisis has shown us that financial stability depends on both of the virtuous twins of effective market regulation and effective prudential regulation. Therefore markets matter for the identification and management of systemic risk and the new IOSCO principles concerning systemic risks in markets recognize the vital importance of this concept. Finally, in response to the changing regulatory environment, IOSCO has also this week reformulated its strategic mission and goals with the aim of maintaining the organisation’s position as the international standard setter for securities regulation and promoting the protection of investors, and fair, efficient and transparent markets.”

Systemic Risk Principle

This new Principle recognises the need for Regulators to be conscious of systemic risk and the role they play in relation to it. The financial crisis has highlighted that financial markets which IOSCO members regulate, or may be exempt from regulation, can be the mechanism by which risk is transferred within the financial system. Under the new principle the Regulator should have, or contribute to, regulatory processes to monitor, mitigate and appropriately manage such risks. Regulators should have particular regard to investor protection, market integrity, transparency and the proper conduct of business within markets as contributing factors to reducing systemic risk.

The eight new principles added to the current 30 are:

• Principle 6: The Regulator should have or contribute to a process to monitor, mitigate and manage systemic risk, appropriate to its mandate;

• Principle 7: The Regulator should have or contribute to a process to review the perimeter of regulation regularly;

• Principle 8: The Regulator should seek to ensure that conflicts of interest and misalignment of incentives are avoided, eliminated, disclosed or otherwise managed;

• Principle 19: Auditors should be subject to adequate levels of oversight.;

• Principle 20: Auditors should be independent of the issuing entity that they audit;

• Principle 22: Credit rating agencies should be subject to adequate levels of oversight. The regulatory system should ensure that credit rating agencies whose ratings are used for regulatory purposes are subject to registration and ongoing supervision;

• Principle 23: Other entities that offer investors analytical or evaluative services should be subject to oversight and regulation appropriate to the impact their activities have on the market or the degree to which the regulatory system relies on them; and

• Principle 28: Regulation should ensure that hedge funds and/or hedge funds managers/advisers are subject to appropriate oversight.

IOSCO’s Goals and Priorities

IOSCO has this week reformulated its mission statement which will guide its goals and priorities over the next 5 years, which include:

• maintaining and improving the international regulatory framework for securities markets by setting international standards;

• identifying and addressing systemic risks;

• Strengthening our role in the international financial community in order to advance implementation of the IOSCO Principles.

IOSCO has also published a briefing note outlining the decisions reached at this year’s Annual Conference.

IOSCO is recognized as the leading international policy forum for securities regulators. The organization's membership regulates more than 95% of the world's securities markets in over 100 jurisdictions and its membership is steadily growing.

IOSCO aims through its permanent structures: to cooperate in developing, implementing and promoting adherence to internationally recognised and consistent standards of regulation, oversight and enforcement in order to protect investors, maintain fair, efficient and transparent markets, and seek to address systemic risks; to enhance investor protection and promote investor confidence in the integrity of securities markets, through strengthened information exchange and cooperation in enforcement against misconduct and in supervision of markets and market intermediaries; and to exchange information at both global and regional levels on their respective experiences in order to assist the development of markets, strengthen market infrastructure and implement appropriate regulation.

The recovery in Latin America and the Caribbean (LAC) is advancing faster than anticipated but at different speeds across countries, says the report which was launched today in Montevideo, Uruguay. Growth continues to gather momentum in the region, driven primarily by a strong rebound in private consumption and improved external conditions. For 2010, regional GDP is expected to grow by 4 percent, after contracting by 1.8 percent in 2009. The report sees, however, marked differences in the outlook across countries. “Overall, we expect a good performance for the LAC economies in 2010,” said Nicolas Eyzaguirre, Director of the IMF’s Western Hemisphere Department. “But within that regional picture, countries with strong ties to global financial markets are likely to stage a more vigorous recovery, helped by their access to ample external financing and by strong prices for their commodity exports. On the other hand, some of the smaller economies will experience more sluggish growth, and some of those will even contract. Accordingly, policy approaches will have to vary considerably to ensure a sustainable recovery across countries.”

For the purpose of analyzing the regional outlook, the report divides LAC countries into four groups: 1) countries that are exporters of commodities and have full access to global financial markets (including Brazil, Chile, Colombia, Mexico and Peru); 2) other commodity exporters; 3) commodity importers that rely heavily on foreign tourism (mainly Caribbean countries); and, 4) other commodity importing countries (including many in Central America that rely on remittances from workers abroad).

The International Monetary Fund (IMF) has released its latest World Economic Outlook report.

In 2010, world output is expected to rise by about 4¼ percent, following a ½ percent contraction in 2009. Economies that are off to a strong start are likely to remain in the lead, as growth in others is held back by lasting damage to financial sectors and household balance sheets. Activity remains dependent on highly accommodative macroeconomic policies and is subject to downside risks, as fiscal fragilities have come to the fore.

In most advanced economies, fiscal and monetary policies should maintain a supportive thrust in 2010 to sustain growth and employment. But many of these economies also need to urgently adopt credible medium term strategies to contain public debt and later bring it down to more prudent levels. Financial sector repair and reform are additional high-priority requirements.

Many emerging economies are again growing rapidly and a number have begun to moderate their accommodative macroeconomic policies in the face of high capital inflows. Given prospects for relatively weak growth in the advanced economies, the challenge for emerging economies is to absorb rising inflows and nurture domestic demand without triggering a new boom-bust cycle.

The World Economic Outlook (WEO) presents the IMF staff's analysis and projections of economic developments at the global level, in major country groups (classified by region, stage of development, etc.), and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects. It is usually prepared twice a year, as documentation for meetings of the International Monetary and Financial Committee, and forms the main instrument of the IMF's global surveillance activities.

Specific chapters are devoted to:

• Systemic Risk and the Redesign of Financial Regulation
• Making Over-the-Counter Derivatives Safer: The Role of Central Counterparties
• Global Liquidity Expansion: Effects on “Receiving” Economies and Policy Response Options

The Monetary and Capital Markets Department produces The Global Financial Stability Report, which provides an assessment of the global financial system and markets, and addresses emerging market financing in a global context. It focuses on current market conditions, highlighting systemic issues that could pose a risk to financial stability and sustained market access by emerging market borrowers. The Report draws out the financial ramifications of economic imbalances highlighted by the IMF's World Economic Outlook. It contains, as special features, analytical chapters or essays on structural or systemic issues relevant to international financial stability.

The GFSR is complemented by The GFSR Market Update (Formerly known as the Financial Market Update), an online bulletin that covers developments in both mature and emerging markets.

This guidance paper complements the suite of IAIS papers on group-wide supervision.

The IAIS recognises that non-regulated entities within and/or connected with the other prudentially regulated non-insurance financial groups are, in principle, the subject of regulations of the other financial sectors. It says the guidance paper does not directly address the treatment of cross-sector entities or groups within an insurance group but it does recognise a need for insurance supervisors to assess risks to an insurance group from links to cross-sector entities and where necessary to take measures to mitigate those risks.

Established in 1994, the International Association of Insurance Supervisors (IAIS) represents insurance regulators and supervisors of some 190 jurisdictions.

The Bahamas has a history of being a trusted partner for international business. The essential role played by the sector has given way to the longstanding commitment by all stakeholders to respond to the needs of the market place and clients.