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HSBC calls for new financial system transparency

Europe's biggest bank HSBC Holdings said fair value accounting and capital adequacy rules had worsened the financial crisis and called for a new set of principles and rules to boost financial market transparency.

HSBC said on Friday it also wanted to create a forum to enable top international businesses to engage with governments and regulators as the new market place is constructed.

“The current financial framework, though well intentioned, has proved inadequate and must be fundamentally revised,” HSBC Chairman Stephen Green said in a statement.

“Fair value accounting has added considerable volatility to results, only part of which is economic and the capital adequacy regime embodied in Basel 2 has hobbled many banks with spiraling capital requirements just when customers need them to be flexible with lending,” he added.

HSBC said the concept of the new forum – “Business 20” or “B20” – was backed by the British government and would mirror the G20 group of the most influential economies, and would be focused on companies with international operations.

“Business needs to co-operate with government and regulators in the creation of a new global marketplace for all industries and consumers,” Green said. (Reuters)