Henrique de Campos Meirelles, governor of the Banco Central do Brasil, together with ECB president Jean-Claude Trichet and Toyoo Gyohten, president of the Institute for International Monetary Affairs, have been appointed co-chairs of the Institute of International Finance’s new group of trustees for the IIF’s Emerging Markets Finance Initiative.
The appointments were announced at the IIF’s Spring Membership meeting by Josef Ackermann, IIF chairman and chairman of Deutsche Bank’s Management Board. Says Ackermann: “The strengths of the emerging markets’ financial system are not determined alone by the day-to-day activities of the marketplace. Crisis prevention and crisis management require political leadership. The increasingly central place that the markets have assumed for emerging markets sovereign borrowers has resulted in a growing recognition that work to strengthen the architecture of the system requires close cooperation between sovereign borrowers, the G7, the IMF and the private financial sector.”
Ackermann suggests that the ‘Principles for Stable Capital Flows and Fair Debt Restructuring in Emerging Markets’ – launched by the IIF in November 2004 and which focus on issues such as investor relations and data transparency – provide a framework for that cooperation. According to Ackermann, the principles have secured strong support from sovereign authorities such as those in Brazil, China, Mexico, Korea, Russia and Turkey over the last 15 months and the IIF is encouraging its members to support the principles.
Part of the newly-appointed trustees’ function will be to provide guidance and support to a principles consultative group (PCG) and to monitor the principles themselves. The new trustees will not be expected to drop in on emerging markets credits whose policies begin to give cause for concern, but will leave that part of the process to the PGC. Nevertheless, their appointment demonstrates the IIF’s enthusiasm for the principles and emerging markets issuers would be well-advised to give them another read.