Electronic security - risk mitigation in financial transactions : public policy issues

This paper builds on a previous series of papers (see Claessens, Glaessner, and Klingebiel, 2001, 2002) that identified electronic security as a key component to the delivery of electronic finance benefits. This paper and its technical annexes (available separately at http://www1.worldbank.org/finance/) identify and discuss seven key pillars necessary to fostering a secure electronic environment. Hence, it is intended for those formulating broad policies in the area of electronic security and those working with financial services providers (for example, executives and management). The detailed annexes of this paper are especially relevant for chief information and security officers responsible for establishing layered security. First, this paper provides definitions of electronic finance and electronic security and explains why these issues deserve attention. Next, it presents a picture of the burgeoning global electronic security industry. Then it develops a risk-management framework for understanding the risks and tradeoffs inherent in the electronic security infrastructure. It also provides examples of tradeoffs that may arise with respect to technological innovation, privacy, quality of service, and security in designing an electronic security policy framework. Finally, it outlines issues in seven interrelated areas that often need attention in building an adequate electronic security infrastructure. These are: 1) The legal framework and enforcement. 2) Electronic security of payment systems. 3) Supervision and prevention challenges. 4) The role of private insurance as an essential monitoring mechanism. 5) Certification, standards, and the role of the public and private sectors. 6) Improving the accuracy of information on electronic security incidents and creating better arrangements for sharing this information. 7) Improving overall education on these issues as a key to enhancing prevention.Knowledge Economy,Labor Policies,International Terrorism&Counterterrorism,Payment Systems&Infrastructure,Banks&Banking Reform,Education for the Knowledge Economy,Knowledge Economy,Banks&Banking Reform,International Terrorism&Counterterrorism,Governance Indicators

Industry structure and regulation

As private firms become increasingly involved in the development of key infrastructure, redefining the role of government from that of serviceprovider to regulator presents both challenges and opportunities. The factors that give rise to sector reforms color how much policymakers invest in regulatory design during the reform process. Nevertheless, two factors are essential to sustainable sector and regulatory reform. First, the right structure must be established for the industry concerned, a structure that allows competition appropriate for that industry. Second, the objectives of regulation must be well defined, with a clear distinction between policymaking, policy implementation, and operations. The extent to which competition can be harnessed to help make regulation efficient, effective, and sustainable depends on the intrinsic technical characteristics of the sector. Each decision affects the sustainability of the regulatory regime in the face of the threat of regulatory capture (both political and commercial). Careful regulatory design is crucial not only for successful sectoral reform but also to balance the interests of various actors (government, consumers, developers, investors, and financiers). One model that has been relatively successful combines new entry, unbundled services, and the unambiguous spelling out of the legal rights and duties for both public and private service providers, administered by an autonomous regulatory authority. Problems with regulation often result as much from inadequate attention to sector structure and fostering competition as from weaknesses in the regulatory authority's institutional capacity. As for the tools of regulation, despite differences in some details between licenses and concessions (and their many contractual variations), these are basically instruments that establish the rights and obligations of contracting parties. Choices about where these rights and obligations are located in the legal hierarchy are shaped by a country's institutional capacity and legal traditions. But the existence of instruments to establish those rights and obligations does not eliminate the need for institutionsto administer them, and thus carry out the regulatory function. Establishing effective sectorwide regulation can be difficult in a developing country, but it is necessary. Policymakers will be able to create effective regulatory regimes where adequate attention is given to sector structure, competition, and institution-building.Environmental Economics&Policies,Trade Finance and Investment,Knowledge Economy,ICT Policy and Strategies,Decentralization,Environmental Economics&Policies,Administrative&Regulatory Law,ICT Policy and Strategies,Water and Industry,Knowledge Economy

Assessment of International Economic Policy Models and Measures: Lessons for Canada

We consider a typology of four social and economic policy models each pertaining to different groups of countries. These four policy systems namely the Nordic model, the Anglo-Saxon model, the Continental model, and the Mediterranean model, are described individually and in terms of selected public policies. In particular, we review the Swedish economic experience in promoting flexible labour markets and reforming its education sector, the French regulatory reforms in telecommunications and health care sectors, the competitive compulsory tendering and best value reforms in the United Kingdom, and the recent economic growth led by trade in Chile. Finally, we draw important lessons for reforms in Canada. Nous analysons quatre systèmes socio-économiques qui représentent différents groupes de pays. Ces modèles socio-économiques incluant le modèle nordique, l’anglo-saxon, le continental et le méditerranéen sont décrits à travers quelques politiques publiques instaurées dans certains pays. En particulier, nous étudions les réformes de la Suède dans les secteurs de l’éducation et du marché du travail, de la France dans les télécommunications et la santé, du Royaume-Uni dans l’attribution des contrats dans le secteur public, et du Chili pour son expansion économique liée au commerce. Suite à cette analyse, nous identifions des leçons importantes et quelques avenues de réformes pour le Canada.Nordic economic model, Anglo-Saxon economic model, continental economic model, mediterranean economic model, economic reforms, Canada., Modèle socio-économique nordique, modèle socio-économique anglo-saxon, modèle socio-économique continental, modèle socio-économique méditerranéen, réformes économiques, Canada.

Regulatory Reflorm in Germany: Enhancing Market Openness through Regulatory Reform

This report assesses the impact of regulations and the regulatory process in Germany on trade and investment, as well as the extent to which market openness considerations are incorporated into the general policy framework for regulations. The assessment is based on six efficient regulation principles developed by the OECD, namely: transparency, non-discrimination; avoidance of unnecessary trade restrictiveness; use of internationally harmonized standards; streamlining conformity assessment; and integration of competition principles into the regulatory framework. Through broad application of the six efficient regulation principles Germany has been very successful in establishing a regulatory framework that has competently underpinned German participation international competition and the global economy. International stakeholders trading with or investing in Germany are confronted with an extensively elaborated regulatory framework of high quality. Particular mention may be made of the important steps taken to facilitate customs procedures, with a positive impact on trade flows. Equally, the country has taken a leading role in contributing to the spread of internationally harmonized standards and the recognition of foreign measures. The reduction of barriers to trade and investment worldwide has enabled Germany to take advantage of the expanding global market. At the same time a gradually more open market in Germany has provided benefits to consumers and contributed to economic growth and innovation. The progressive liberalisation of the German market has been driven not only by domestic forces, but even more so by regulations that follow from agreements at the regional and international level. Despite Germany's success in establishing a regulatory system that strongly supports market openness, there remains room for improvement in some areas. The general accessibility of regulatory information permits high levels of transparency; however, the extreme complexity of the legal architecture represents a significant challenge to new market entrants, particularly foreigners. Non-domestic stakeholders may need a substantial amount of time and resources to understand various and occasionally duplicative regulations and institutions applying them. This circumstance is rendered more acute by the exactness with which the regulatory framework is implemented. In addition, there is room for progress in the area of public procurement, where the country is not profiting from the opportunity of taking a forefront position within the EU which would reflect its economic capacity. Among EU countries Germany has the lowest level of public procurement tenders openly advertised at the European level and does not provide adequate legal protection for bidders competing for tenders below the EU threshold. In Germany, like in other EU countries, the regulatory processes in areas directly or indirectly affecting trade and investment are initiated at the EU level or directed by decisions of the EU with implementation often taking place at the national level. Reflecting this distribution of responsibilities, there is a tendency at the national level not to consider the full extent of international implications. At the national level the advantages of adopting an international perspective are not yet taken to their full extent. To give an example, regulatory impact assessments do not explicitly address trade and investment related aspects. The German administration is aware of the need to further change the regulatory framework in order to enhance economic growth. Several promising ongoing reform initiatives address many, if not most, areas covered in this report. The impact and pace of these reforms remains to be seen and evaluated.Regulatory reform, trade, market access, non-tariff measures

Submission to the Attorney-General’s Department on the Exposure Draft Telecommunications and Other Legislation Amendment Bill 2015

EXECUTIVE SUMMARY As has been stated in previous submissions to Government, the Associations acknowledge Government’s desire to protect telecommunications infrastructure and the information transmitted across it from unauthorised access and interference. Indeed, Australian Carriers, Carriage Service Providers and Carriage Service Intermediaries (C/CSPs) and other industry participants have an active and vested interest in ensuring that the nation’s networks and communications infrastructure are robust and resistant to external attack. Industry is, however, unable to support the proposed Telecommunications Sector Security Reform (TSSR), as described in the exposure draft legislation, for reasons including that it constitutes regulatory ‘over-reach’ in the form of a framework that: will face challenges protecting communications networks, i.e. it will not deliver the increased protection the proposed reforms are aiming to achieve; is out of step with regulatory approaches to protecting networks adopted in other countries, including the UK, USA and Canada, thereby putting Australia at a disadvantage in fighting cyber threats and undermine Industry’s ability to support these important peers; hands unjustifiably significant additional and intrusive powers to Government and places regulatory burdens on Industry that will undermine its ability to protect against and respond to cyber attacks; risks being highly disruptive to the deployment of new network technologies that are more robust in preventing cyber attacks; will be a significant deterrent to technological investment in Australia; imposes additional costs on Industry and (ultimately) consumers undermining Australia’s competitiveness at a time when digital innovation is an important area for growth for Australia; fails to offer protection/indemnity to C/CSPs against the risk of civil litigation through ‘safe harbours’, thereby limiting information sharing and the ability to quickly respond to threats and to jointly engage in preventative action; carries the risk that competition in infrastructure supply will be reduced, to the detriment of all Australians; lacks transparency; and fails to provide adequate consultative mechanisms and avenues of appeal