Corporate governance, rating agencies' reform to top G20, says Italian expert

08:26, June 09, 2010      

Email | Print | Subscribe | Comments | Forum 

Global corporate governance and rating agencies' reform are set to top the upcoming Group of 20 ( G20) summit, an Italian expert told Xinhua in a recent interview.

Alberto Mingardi, director of the Turin-based Bruno Leoni Institute, said he expected the European Union as a whole to play a unique role in promoting tighter rules aimed at strengthening the global financial governance.

According to Mingardi, the crisis' negative effects are still looming and the two most urgent measures to be discussed the G20 summit regard competition broadening among rating agencies and stricter rules for bank managers.

"First: financial managers must be more correct in respecting the shareholders' interests and a cap must be implemented on their wages. Second: it's unacceptable that world markets are tyrannized by just three rating agencies - Moody's, Fitch and Standard & Poor 's that operate in a sort of monopolistic regime"he observed.

The U.S.-based rating agencies work in total absence of competition from others and in conflict of interest, he stressed.

"In the States there are a total of 11 rating agencies but just three have an international status and this is unfair. They are paid by the same firms which benefit from their ratings and this triggers a non-transparent system where financial information is manipulated and not impartial."

For Mingardi, in order to ensure greater fairness the G20 must intervene in the rating agencies' sector by increasing competition there.

Talking about Italy's role at the upcoming summit, Mingardi praised the government's resilience in front of the crisis and non- intervention by means of banking bail-outs.

"The Italian government rapidly, positively reacted to the global downturn. Both the top banker Mario Draghi and the Economy Minister Giulio Tremonti repeatedly stressed the emergency and called for action."

But for the expert the recently approved budget plan aimed at curbing public expenditures is insufficient in sustaining the country's recovery and the reform of the welfare state, of which Italy is badly in need of.

"The budget is just an emergency measure to give a signal of Italy's stability to the euro-zone. However, it's not enough. Italy will never triumphantly exit the crisis because the country suffers from pre-exisitng problems that the crisis has ended-up accentuating," he noted.

Structural, lingering difficulties and the absence of important reforms is what ails Italy. According to Mingardi, "Our main quandary has always been the uncertainty of the law that hinders investments, curbing productivity levels. Rules in this country are too complicated and change almost on a daily base."

In such a shaky frame, new entrepreneurs and foreign investors are thus disincentivated from starting any kind of business.

Therefore, law enforcement and stability stood as the number one emergency Italy had to tackle in the long-run through a deep restructuring process aimed at boosting economic prosperity, Mingardi concluded.

Source:Xinhua

(Editor:黄蓓蓓)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Giant red lantern lights up in Tiananmen Square to celebrate the coming National Day on Oct. 1. (Xinhua/Li Xin)
  • A ceremony is held in Taipei, southeast China's Taiwan, on Sept. 28, 2011, to commemorate the 2,562nd birthday of Confucius (551-479 BC), a Chinese thinker, educationist and philosopher. (Xinhua/Wu Ching-teng)
  • The world's first Boeing 787 Dreamliner for delivery arrives at Haneda airport in Tokyo, capital of Japan, on Sept. 28, 2011. The Boeing 787 Dreamliner, whose buyer is All Nippon Airways (ANA), will implement a flight of ANA on Oct. 26 from Tokyo's Narita Airport to Hong Kong in south China. (Xinhua/Ji Chunpeng)
  • A Libyan National Transitional Council (NTC) fighter shows what is believed to be human jawbone found inside a mass grave near Abu Salim prison in Tripoli, Libya, Spet. 27, 2011. The NTC on Sunday said they had found a mass grave containing the bodies of 1,270 people killed by Gaddafi's security forces in a 1996 massacre at Abu Salim prison in southern Tripoli. (Xinhua/Li Muzi)
  • Rescue workers and local residents search for survivors after a building collapsed in old Delhi, India, Sept. 27, 2011. At least 10 people were killed and 35 injured when an old three-storey building collapsed. More than a dozen people are still feared trapped under the debris, police said. (Xinhua/Partha Sarkar)
  • A visitor has flying experience in the windmill castle of Jinshitan National Holiday resort in Dalian, northeast China's Liaoning Province, Sept. 27, 2011. The castle is a 23-meter-high building with 21 meters in diameter. The castle uses wind tunnel to make objects floating in the air. It is the first indoor stadium in China, which enables people to have flying experience. (Xinhua/Zhang Chunlei)
Hot Forum Discussion