The Financial Stability Forum has flagged up areas of concern in financial regulation.

At its meeting in Paris this week, they say that, as part of their ongoing dialogue with market participants, members exchanged views with representatives of the Institute of International Finance on how regulation could be made more effective and efficient. They discussed ways to further enhance the dialogue between regulators and the financial industry.

Their Offshore Financial Centre Review Group, they say, is continuing to monitor progress by FSF member bodies in working with OFCs to improve cross-border cooperation and exchange of information. "The FSF noted the progress made in some OFCs and urged its member bodies to continue their efforts, including monitoring the progress achieved to improve international co-operation. The FSF encouraged OFCs to continue to cooperate with IOSCO and to participate in the IMF’s ongoing assessment program in a timely fashion and to publish their IMF reports, including the detailed assessments".

The FSF said it welcomed progress in implementing the IMF's information framework initiative, and urged the few remaining jurisdictions yet to participate to do so.

Also discussed in Paris on Wednesday ( September 6th) was preparedness for an avian flu pandemic in financial authorities and the wider financial sector, including efforts to foster international communication and cooperation.

In addition, members expressed concern about recent incidents that raised questions about the quality controls in place within global accounting firms and the concentration of audit services for large companies at the four largest audit firms. Members agreed to promote higher audit quality, given its importance for regulatory efforts. The FSF welcomed the proposal to create an International Forum of Independent Audit Regulators that could enhance and bring more global consistency to audit oversight and audit quality.

The next meeting of the Financial Stability Forum will be held in Frankfurt on 29 March 2007.