Following the financial crises of the late 1990s, many proposals for reforms to the international financial system to lessen or prevent future crises were discussed in the international community. Eventually, one idea for which there was consensus was the adoption and implementation of internationally-recognized standards and codes of good practice in economic and financial affairs. Standards and Codes set out what are widely accepted as good principles, practices or guidelines in specific fields. Countries by following these standards will strengthen their financial systems through sound regulation and supervision, greater transparency, and more efficient and robust institutions, markets, and infrastructure; and with improved market integrity and information-flow, reduce the risk of financial distress and contagion. The standards initiative was launched as a program to improve crisis prevention and management. Evidence now verifies that standards compliance also contributes to improved performance at the system, country, and enterprise level.

The "12 Key Standards for Sound Financial Systems", developed by the international community, were compiled by the Financial Stability Forum in 1999 in response to the described need for a global set of best practices. They are divided into three areas: Macroeconomic Policy and Data Transparency; Institutional and Market Infrastructure; and Financial Regulation and Supervision. In this way the standards cover all the key elements that make-up a sound financial system. The Financial Sector Assessment Program and Reports on Observance of Standards and Codes of the International Monetary Fund and World Bank were launched in 1999 as monitoring mechanisms to assess standards compliance. Below you will find detailed descriptions of all the standards, the standard-setting bodies as well as suggestions for further reading.

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Macroeconomic Policy and Data Transparency

• » Data dissemination
  
• » Monetary policy transparency
  
• » Fiscal policy transparency
  

Institutional and Market Infrastructure

• » Insolvency
  
• » Accounting
  
• » Corporate Governance
  
• » Auditing
  
• » Anti-Money Laundering
  
• » Payment Systems
  

Financial Regulation and Supervision

• » Banking Supervision
  
• » Securities Regulation
  
• » Insurance Supervision