Implementation of international standards is a key component of efforts to strengthen domestic economic and financial systems and promote international financial stability. Market incentives can encourage national authorities, and where relevant, the private sector, to implement international standards, provided certain preconditions are met. Consultations with market participants make clear that efforts are needed on many fronts to establish these preconditions. Thus, few market participants to-date explicitly take account of an economy's observance of standards in their lending and investment decisions, or use ROSCs directly for risk assessments leading to pricing and allocation decisions. However, there is implicit consideration of information on observance of standards insofar as market participants look at features of the economy covered by the 12 key standards, and interest in making greater use of standards and ROSCs as more information on them becomes available.
More active marketing is needed than merely placing information on websites.
The FSF should encourage the IFIs, standard-setting bodies, and national authorities to better demonstrate how information on observance of standards can help provide insights on the risk factors that market participants are most interested in. This would include using their outreach programmes to clarify the role of standards in strengthening financial systems, emphasising that standards have been developed in response to past crises and undertaking analytical work on the links between observance of standards and potential vulnerabilities. FSF members should make a commitment to disseminate information on assessments they might undertake. Official incentives can be a powerful means to encourage economies to implement standards and to reinforce market incentives. A three-pronged approach is proposed.