BIS appoints leadership of the Financial Stability Institute

The Bank for International Settlements (BIS) today appointed Mr. John G. Heimann as the first Chairman of the Financial Stability Institute of the BIS. It also appointed Mr. Frederik C. Musch as the Institute's Associate Director. Mr. Heimann will take up his responsibilities on 1st February 1999, and Mr. Musch his with immediate effect.

Mr. Heimann is at present Chairman, Global Financial Institutions at Merrill Lynch & Co., Inc., and a member of the firm's Executive Management Committee. Among other prestigious appointments, he is currently Chairman of the Financial Services Council, and Vice-Chairman of the Board of Trustees of the National Policy Association. He is also a Member and Treasurer of the Group of Thirty, and Member of the Board and Executive Committee of the Institute of International Finance. Prior to joining Merrill Lynch in 1984, Mr. Heimann was a senior US regulator, serving as Comptroller of the Currency from 1977 to 1981. In this capacity, he was a member of the Board of Directors of the Federal Deposit Insurance Corporation and chaired the Federal Financial Institutions Examinations Council. Mr. Heimann has also served as Superintendent of Banks, New York State Department of Banking, and as a member of the Federal Reserve Bank of New York's International Capital Markets Advisory Committee and the Council on Foreign Relations.

Mr. Musch has until now been Secretary General of the Basle Committee on Banking Supervision, a position held since 1992. Before that, he was a Deputy Executive Director of the Netherlands Bank, in which capacity he was a member of the Basle Committee for six years. Over this period, he chaired the Committee's Models Task Force and Capital Liaison Group and was closely involved in drawing up the Core Principles for Effective Banking Supervision, developed in conjunction with supervisors from a range of emerging market economies. He has until now served as the Chair of the Committee's Core Principles Liaison Group. Mr. Musch was also a founding member of the Netherlands Securities Board, overseeing the Amsterdam Exchanges.

The Financial Stability Institute is a joint initiative of the BIS and the Basle Committee on Banking Supervision and was set up in response to the need to strengthen financial systems worldwide. Its early focus will be to promote better and more independent banking, capital market and insurance supervision based on further implementation of the Core Principles for Effective Banking Supervision. Interaction between the private sector, central banks and supervisory authorities will play an important role in the Institute's activities. Close cooperation with the IMF, the World Bank and with the Toronto International Leadership Centre for Financial Sector Supervision, sponsored by the World Bank and the Government of Canada, is envisaged. Over time, the Institute will broaden its coverage to other areas bearing on financial system stability, including the implementation of core principles currently under development by international securities, insurance and payment system regulators.

Mr. Hans Tietmeyer, President of the Deutsche Bundesbank and Chairman of the G-10 central bank Governors, said he expected the Institute to make a significant contribution to strengthening financial systems globally. "Financial systems weakness has been at the heart of the recent crises. By strengthening the capacity of officials to identify sources of vulnerability and to implement rigorous preventative measures, the Institute should help address this problem."

Mr. William McDonough, President of the Federal Reserve Bank of New York and Chairman of the Basle Committee on Banking Supervision, said: "We are extremely fortunate to have secured the services of someone of Heimann's caliber and experience. As a respected former regulator and a senior executive of a major financial institution, he has extensive knowledge of both supervisory challenges and financial market practices. This combination is key to developing the supervisory institutions and personnel required in today's globalised markets. With Erik Musch's long supervisory policy experience and extensive knowledge of implementation needs, the Institute will have a formidable team."

The BIS Institute is guided by an Advisory Board, whose members comprise: Mr. Andrew Crockett (Chairman), General Manager, BIS; Mr. Gerald Corrigan, Chairman, International Advisors, Goldman Sachs; Mr. Michel Prada, Chairman of the Technical Committee, International Organization of Securities Commissions (IOSCO); Mr. Wendelin Hartmann, Director, Member of the Council, Deutsche Bundesbank, and Chairman, Committee on Payment and Settlement Systems; Mr. Knut Hohlfeld, Secretary General, International Association of Insurance Supervisors; Mr. William McDonough, President and Chief Executive Officer, Federal Reserve Bank of New York, and Chairman, Basle Committee on Banking Supervision; Mr. Guillermo Ortiz, Governor, Bank of Mexico; Mr. Tommaso Padoa-Schioppa, Executive Director, European Central Bank; Mr. Yutaka Yamaguchi, Deputy Governor, Bank of Japan, and Chairman, Euro-currency Standing Committee; and Mr. Chen Yuan, Governor, State Development Bank of China.