"to draw up a “world risk map” of global financial institutions to allow financial authorities to quickly identify future trouble spots."

Actually, here's an idea I like, because it focuses on problem areas before they occur. It has the funnel approach I favor of looking for possible problems and then analyzing, instead of trying to micromanage with rules and regulations. From the FT:

"German chancellor Angela Merkel is set to push international leaders to draw up a “world risk map” of global financial institutions to allow financial authorities to quickly identify future trouble spots.

Unveiling the findings of a government-commissioned expert panel on Friday Mrs Merkel also proposed the creation a central body to oversee credit ratings agencies, an international register of major loans and the better alignment of managers’ pay to discourage short-term risk taking.

The chancellor and finance minister Peer Steinbrück are expected to lobby at the G20 world financial summit in Washington this weekend for all financial institutions, markets and jurisdictions to be made subject to proportionate regulatory control in order to eliminate “blind spots” in the financial system.

This supervision is intended to shed more light on the opaque workings of hedge funds and insurance companies, which the government believes have contributed to the severity of the current crisis.

The idea has found support in Europe, the US is thought to be hostile to what it views as a heavy-handed approach.

Ms Merkel said on Friday she was "somewhat surprised" about warnings against too much regulation before the crisis had been overcome."

I don't see the idea of supervision, or fact finding, as heavy-handed, as compared to actual rules. I'll try and find out more about this proposal and how it fares.

"The chancellor will go to Washington armed with a set of policy ideas prepared in the past two weeks by a six-strong panel led by Otmar Issing, a former European Central Bank chief economist.

Prof Issing said the panel had considered ways to reform the world's financial architecture in order to prevent a repeat of the current crisis which had left the financial system "on the edge of ruin".

Among the panel's suggestions isa global risk map which would highlight at a single glance areas where pressure is building up in the financial system.

The map would show all major international institutions and financial products, including credit insurance and asset-backed securities.

Similarly, the group has suggested setting up a cross-border credit register of major loans to provide greater transparency to businesses and governments seeking to evaluate risk.

Credit agencies, which have been criticised for dishing out spurious ratings in the pursuit of profit and failing to spot the build-up of risk, should be subject to a central supervisory body that would report annually on their work the report said.

Furthermore the fee structure of credit agencies must be reformed to incentivise the issue of a correct rating, for example by making agencies buy into the tranches of debt that they rate.

The group also proposed realligning management compensation schemes to motivate long-term performance.

A new compensation model could incorporate both bonus and malus components, similar to the system used in the car insurance industry,an idea favoured by Mr Steinbrück."

I still like it, especially the talk about credit ratings agencies, which Robert Waldmann on Angry Bear claims is basically a cartel.