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Press Release

Investment Management Association welcomes European Commission consultation on corporate governance

3 June 2010

The IMA welcomes the publication of the European Commission's publication of a green paper on ‘Corporate Governance in Financial Institutions', in light of the financial crisis.

Commenting, Liz Murrall, Director of Corporate Governance and Reporting at IMA said:

"Although it is now apparent that there were failings in banks' corporate governance and at times investors' scrutiny and challenge to banks' strategy in the run up to the crisis, these failings did not cause the crisis nor would changes to governance have prevented it, but the experience prompts an examination of the framework and we welcome the EC's initiative in this area.

"We will be carefully reviewing the proposals. Although the main focus appears to be on banks and life companies, it is important that a "one size fits all" approach is not adopted and that the differences in the underlying systemic risks that particular financial institutions pose are recognised. For example, the business model in the fund management industry is generally regarded as low risk and is very different to that in the banking sector, in that client money and assets are segregated from those of the firms, and therefore the manager's activities do not put their security at risk."

The IMA will be responding to the consultation.

A copy of the European Commission's ‘Green Paper on Corporate Governance in financial institutions' is attached.

http://ec.europa.eu/internal_market/company/modern/corporate_governance_in_financial_institutions_en.htm



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Investment Management Association

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