§ Mr. CousinsTo ask the Chancellor of the Exchequer what steps he is taking to encourage financial institutions to improve their risk management systems. [83243]
§ Ms HewittImproving risk management is a priority both domestically and internationally. The G7 Finance Ministers and Central Bank Governors have encouraged the Basle Committee on Banking Supervision to finalise its work on revising the Basle Capital Accord so that it better reflects risk. More specifically, following the near-failure of the LTCM hedge fund, the Basle Committee published a sound practices paper setting out ways in which financial institutions could improve their risk management processes. Other international bodies are also looking at issues relating to hedge funds and their work will be coordinated by a working group of the newly established Financial Stability Forum. The Financial Services Authority are working closely with the institutions they supervise to ensure that their risk management processes follow good practice.