Cisco Steps Into G20 Breach

The global financial regulation to which the G20 members pledged at their April 1 meeting must be underpinned by technology to bring relevant data and collaborating partners together, argues Cisco Systems Inc, in a whitepaper just published.

"Yet, throughout several hundred pages of publicly available reports produced to support the G20 Summit—from the EU, FSA, UN, U.S. Treasury, and G20 Working Groups—there is not a single mention of the role technology could play in supporting the new system," notes Cisco, one of the world's biggest technology firms, best know for supplying switches are routers.

Jim Greene, vice president of the San Jose, Calif. firm's consulting arm, Cisco Internet Business Solutions Group (IBSG), which published the report, tells BS&T that the "shared service utility" necessary to make a reality of transparent, global financial regulation will principally require three types of vendor. They are telcos, network infrastructure specialists, and providers of specialized applications, such as, for example, translating speech in foreign languages into English. Securing the many existing communication channels will also be an important feature of the future bank regulatory system, Greene notes.

"For an environment of collaboration to occur, there really needs to be a financial skin," says Greene, global head of IBSG's financial services practice. Cisco has already created such a 'skin' to further international cooperation on climate control, compared to which its report says the collection of financial data "would seem simple". (The UN approved "Planetary Skin," Cisco developed earlier this year with NASA is an intelligent, IP-based network platform for capturing worldwide environmental data from satellite, airborne, maritime, terrestrial, and other sources.)

Asked about the danger that the G20 paid lip service to an ideal that won't come to pass, Greene agrees that the hard part is not the technology, but getting people to agree. He adds, "We're in the ditch so far that the aptitude for collaboration is very high The motivation to get an environment investors can trust is the highest I've seen it in 30 years".

At this very tentative stage, he says it's hard to put a timeline on when the necessary utility would be in place, or how much it would cost to create. The main cost is likely to be in development/consulting, he adds. " The capacity already exist, the architecture we know. The development will be more about 'What will it be?' versus 'How will it work?' Transparency to one is opaque to another. The "macro-prudential" supervision to which the G20 committed will be facilitated by enhanced roles for the Washington-based International Monetary Fund (IMF), and by a strengthened and expanded Basel-based Financial Stability Forum (FSF), including all G20 countries and renamed the Financial Stability Board (FSB). The G20 collective includes the European Union and represent about 90 percent of the world's output (GDP).

As to whether the Board, created on April 2, has or will put out a tender for technology providers to facilitate a new world financial order, Greene says, in these early days, "we have no insight into that".