[lg policy] Bank of England:Common Financial Language Could Limit Risk Of Crises

Harold Schiffman hfsclpp at GMAIL.COM
Thu Mar 15 14:40:05 UTC 2012

BOE Haldane:Common Financial Language Could Limit Risk Of Crises

Published March 14, 2012

Dow Jones Newswires

LONDON –  Financial firms should adopt a common language for
transactions and products, a Bank of England policy maker said
Wednesday, arguing that it could reduce risks in the system and curb
the impact of financial crises.

Andy Haldane, the BOE's executive director for financial stability,
said banks and other financial firms could benefit from a common
language in the same way barcodes revolutionized the supply chain for
goods, and HTML led to the explosion in usage of websites.

"A common financial language has the potential to transform risk
management at both the individual-firm and system-wide level," Haldane
said in a speech in New York, according to the text of his remarks.

He added it would also reduce the barrier to entry for new firms,
increasing competition and helping tackle the problem of "too big to
fail"--where governments have to bail out banks because their collapse
would be too damaging for the economy.

A common industry-wide language would reduce risk by increasing the
amount of real-time information each firm has about its own activities
and those of competitors, he said. Large amounts of data collection
could be automated, lessening the chance of human error that
contributed to the collapse of Lehman Brothers and exacerbated the
subsequent chaos.

Read more: http://www.foxbusiness.com/news/2012/03/14/boe-haldanecommon-financial-language-could-limit-risk-crises/#ixzz1pCFFhnZR

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