Institute of International Finance

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Group.png Institute of International Finance  
(Finance institutionWebsiteRdf-entity.pngRdf-icon.png
Institute of international finance.png
Formation1983
HeadquartersWashington, USA
Interestsbanking, finance, debt
SubpageInstitute of International Finance/Chairman
Membership• Axel Weber
• Candido Bracher
• Piyush Gupta
• Walter Kielholz
• Brian Porter
• Timothy Adams
• Saeed Al-Ghamdi
• Abdulla Al-Khalifa
• Oliver Bäte
• Walter Bayly
• Ana Botín
• Siqing Chen
• John Dugan
• Douglas Flint
• Thomas Gibbons
• Peter King
• Jean Lemierre
• Michel M. Liès
• Kanetsugu Mike
• Jean Pierre Mustier
• Rania Mahmoud Nashar
• Ronald O’Hanley
• Tetsuo Ohkubo
• Frédéric Oudéa
• Daniel Pinto
• Urs Rohner
• Alison Rose
• Suzan Sabanci Dincer
• Tatsufumi Sakai
• Christian Sewing
• Bernhard Spalt
• Jes Staley
• Olaug Svarva
• Makoto Takashima
• Jessica Tan
• Johan Torgeby
• Sim Tshabalala
• Mark Tucker
• Carlos Torres Vila
• José Viñals
• John Waldron
• Shemara Wikramanayake
• Martin Zielke

The Institute of International Finance, Inc. (IIF) is a global association or trade group of financial institutions. It was created by 38 banks of leading industrialized countries in 1983 in response to the international debt crisis of the early 1980s, and is the "leading voice for the financial services industry on global regulatory issues."[1]

The IIF's strategy is to influence decision-makers at the highest level (US President, German Chancellor etc[2]).Its reports have been used as roadmaps to manage crises to the advantage of the finance industry.

Overview

It has more than 450 members from more than 70 countries[3]. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks.

Greek Crisis

A document from the IIF was used by politicians as a guide (roadmap) to decide how large the participation of private banks should be in debt relief for Greece[4]. The IIF therefore demanded "additional resources from European taxpayers" to save Greece[5]. The IIF proposed three different models:

  • Exchange of bonds: Outstanding bonds are to be replaced by new bonds with lower interest rates and longer terms. This is secured by a fund financed by Greece or by the EFSF (European Financial Stability Facility), i.e. European taxpayers. As a result, the private banks have no direct losses and, moreover, have a low risk of loss.
  • Exchange at a discount: Banks could redeem outstanding bonds at prices well below their value and replace them with new bonds with longer terms. The interest on the bonds is based on the market interest rate. This is also secured by the EFSF, which is borne by European taxpayers.
  • Buyback: Greece is buying back Greek bonds from the market through an agency to be set up. This was to be financed by the EFSF or by loans from other countries.

The chairman of the IIF Josef Ackermann took part in the summit at which the conditions for the rescue of Greece were decided. The economist and economist Peter Bofinger stated: "The banks and insurance companies contribute zero percent to the rescue of Greece. They are the winner of the summit negotiations[6]." Bofinger concluded: "The bank lobby was well represented at the summit. They asserted their interests very well."[7]

2008 Financial Crisis

Shortly after the financial crisis, in November 2008, before the world financial summit in Washington, the IIF turned against excessive regulation of the banking sector.[8]

At the same time, Goldman Sachs' exit from the IIF in 2008 caused a stir. The background to this was a dispute over accounting rules during the financial crisis [9]. Goldman Sachs also criticized the IIF's attempt to hide the actual burdens of the financial crisis. [10] In October 2010, a Goldman Sachs spokesman announced that he wanted to return to the IIF - because of "similarities in numerous regulatory issues."[11]

In 2010, the IIF came out at its congress in Vienna with targeted opinion-making against stricter financial market regulation, as part of the Basel III legislative package. [12]

Board

The board members represent 30 of the most powerful financial institutions in the world[13]



References