It is to produce recommendations concerning issues such as the pricing of risks; conduits and the contingent liquidity risks to which firms have been exposed by using offbalance sheet instruments; valuation questions, especially where markets are thin or absent; ratings; and, transparency, disclosure and communications to define appropriate standards.
We can also expect some progress with regard to transparency when Basel II comes into force in Europe at the beginning of next year. The third pillar of this new framework addresses the issue of improving market discipline through public disclosure. Furthermore, we need transparency and reliability with regard to valuations of financial instruments.