Recent innovations in international banking (Cross Report)

April 1986

At the request of central-bank Governors of the Group of Ten countries a Study Group was established in early 1985 to examine recent innovations in, or affecting, the conduct of international banking.

The Study Group carried out extensive discussions with international commercial and investment banks that are most active in the market for the main new financial instruments. The purposes were both to improve central-bank knowledge of those instruments and their markets as the situation existed in the second half of 1985, and to provide a foundation for considering their implications for the stability and functioning of international financial insti tutions and markets, for monetary policy, and for banks' financial reporting and the statistical reporting of international financial developments. Alongside this work the Basle Supervisors' Committee has undertaken a study of the prudential aspects of banking innovations and a report on the management of banks' off-balance-sheet exposures and their supervisory implications was published by that Committee in March 1986.

The Study Group's aim was not to recommend detailed policy changes but rather to develop a general framework in which the Group of Ten central banks and the BIS could consider their implications for the evolution of the structure and functioning of the international banking system. While the main purpose of the report is to raise issues for internal discussion it is being published in the hope that the general framework offered may contribute to what is likely to be a continuing public debate, both internationally and within countries, on these issues.

The report should be considered solely as the product of the Study Group's work and not as necessarily representing the views of either the central banks of the Group of Ten countries or the BIS. The members of the Study Group were:

Chairman: Mr. Sam Y. Cross - Federal Reserve Bank of New York
Belgium: M. Jean-Jacques Rey - National Bank of Belgium  
Canada: Mr. William E. Alexander - Bank of Canada  
France: M. Jean-Paul Redouin - Bank of France
Germany: Mr. Gerhard Laske - Deutsche Bundesbank
Italy: Dr. Giovanni Cristini - Bank of Italy
Japan: Mr. Keiji Matsuda - The Bank of Japan
Luxembourg:  Mme Andree Billon - Luxembourg Monetary Institute
Netherlands: Mr. Wouter L. Benard - Netherlands Bank
Sweden: Mr. Ake Tornqvist - Bank of Sweden
Switzerland: Dr. Bruno Muller - Swiss National Bank
United Kingdom:  Mr. Lionel D.D. Price - Bank of England
United States: Mr. Charles M. Lucas - Federal Reserve Bank of New York
BIS: Dr. Helmut W. Mayer
Secretariat: Dr. Julian S. Alworth - BIS