**Treasury Secretary John W. Snow**
The US Treasury Secretary testified today before the House Financial Services Committee on the International Financial System and the Global Economy. His presentation focused on the US Administration’s international economic policy priorities, particularly those aimed at *“reducing risks and strengthening opportunities going forward”*.
**Compliance with International Financial Standards**
The House Committee was told of the importance of fostering compliance with international financial standards as a means of reducing the vulnerability of the global financial system. Secretary Snow said those countries where the institutional environment is well-regulated and transparent tend to demonstrate better economic performance and greater financial stability.
The US Treasury promotes compliance with international standards in bilateral dialogues, in multilateral fora such as the Financial Stability Forum, and in the IMF and World Bank through support for financial sector assessment programs and integration of financial sector reform priorities – identified by these programs – into broader surveillance and country programs. Treasury is also actively engaged with the standard-setting bodies, international organizations, and other national authorities in the process of creating and revising the international financial standards themselves. In this connection, the Treasury Department and U.S. financial regulators conduct bilateral dialogues with counterparts – with the objective of encouraging movement toward more competitive, better regulated financial regimes and mitigating actual or potential cross-border frictions in the financial services realm, thereby contributing to a stronger economy.
**Fighting Terrorist Finance**
Treasury’s goal is to draw upon all available financial information to detect and disrupt terrorist money flows. The Secretary noted the Department has been at the forefront of a concerted effort to collect, share, and analyze all available information to track and disrupt the financial activities of terrorists. He noted that Finance ministries and central banks play a key role in this effort, as *”financial intelligence is among our most valuable sources of data for waging this fight.”*
Comprehensive integration of the IMF and the other international financial institutions as part of the global war on terrorism has been a consistent policy priority for the United States, which has encouraged close collaboration between the international financial institutions and the Financial Action Task Force (FATF) to assess global compliance with the anti-money laundering and counter-terrorist financing standards set by FATF.
In 2004 the IMF and World Bank Boards endorsed a common assessment methodology drafted by the FATF that provides a consistent framework for assessing compliance with FATF anti-money laundering and counter terrorist finance recommendations. That initiative was led by the US, says Secretary Snow. The respective Boards reaffirmed this decision in May of this year — agreeing that comprehensive anti-money laundering/combating the financing of terrorism assessments will be included as a regular part of all financial sector assessments and on-going surveillance. By the end of 2005, the IMF and World Bank had conducted over 50 country assessments.
*”We will continue to emphasize that protecting the financial system from abuse is integral to international financial stability and to call on the international financial institutions to collaborate more closely with FATF toward this end,”* testified Secretary Snow.
The House Testimony also focussed on issues such as the promotion of international trade and investment, modernising the IMF, and supporting economic growth in developing countries.