ICC Bulgaria holds first Banking Commission seminar

22 October 2008

 ICC Bulgaria holds first Banking Commission seminar

Sofia, 22 October 2008 − The first seminar of the newly created ICC national committee in Bulgaria was held 15-16 October at the Grand Hotel in Sofia. The event brought together more than 40 leading bankers to discuss the ICC banking rules and pressing issues in global finance.

The meeting began with a special briefing from the ICC Secretariat’s Policy Manager for the banking and financial sectors, Thierry Senechal, addressing the current financial crisis and presenting the ICC Banking Commission.

Mr Senechal discussed the devastating effects of the US sub-prime mortgage crisis. “A downturn in the housing market of the United States, risky practices in lending and borrowing, and excessive individual and corporate debt levels have caused multiple adverse effects on the world economy,” he said. “We have lived through many crises in recent years. At the end of each, the focus on avoiding the next one has always been the same trinity: more transparency and accountability, more regulations, and a total new approach on risk management. This is an inadequate response to systemic crises,” he added.

Asked about the possible actions to be taken, Mr Senechal indicated that it was important to have a long-term view on the financial system. “Crises do not occur randomly and they always follow a pattern. A scenario planning has to be developed and this is what we do at ICC. We are now working on the ICC Global Scenarios for Financial Markets 2015.” In time of crisis, he supported specific actions in the short term: reduction of significant amounts of toxic assets; ensuring the working of the interbank market (by guaranteeing loans); prevention of bank runs by guaranteeing deposits; and adapting accounting rules to market realities. In the medium range, a comprehensive and coordinated approach was needed, he said.

Mr Senechal’s presentation also reviewed existing ICC work in the area of corporate governance. He presented the principle of “enlightened shareholder value,” under which information has to be made available at all levels of the corporate pyramid but also to the outside. “For trust to be a building block of the financial system, some codification of corporate governance principles is much needed,” he said. “Directors and members of corporate boards should be systematically trained on corporate governance including Board oversight of the full spectrum of financial, social and business risks.”

The following sessions were chaired by Pavel Andrle, Secretary of the ICC Banking Commission in Czech Republic and a member of the ICC Consultative group on UCP 600. Mr Andrle presented the recent revisions of ICC banking rules, including the UCP 600 that came into effect on 1st July 2007. He indicated that the UCP 600 is a good example of self-regulation in the trade finance industry.

“Such rules have now become an international market practice. The rules are used by most bankers in trade finance and they are universally recognized. UCP proves to be a great example on how the private sector can develop its own set of guidelines for more efficiency in promoting cross border trade,” Mr Andrle said.

Full text of an interview with Thierry Senechal can be viewed here.

ICC Bulgaria is organizing two other seminars on Incoterms 2000, 17-18 November, and International Arbitation, 24 November. More details about the forthcoming seminars can be seen on http://www.icc-bulgaria.bg/en/events

The views in the above interview express only the opinion of Mr Thierry Senechal and do not necessarilly coincide with the official position of ICC or ICC Bulgaria.

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