Standards and Codes: Firing at the Wrong Target?

Abstract

The intense level of activity regarding standards and codes that can be seen in the official sector is not especially evident in the private sector. Among private-sector investors and analysts there is, by and large, a rather high degree of indifference or ignorance about the standards and codes (S&C) effort. Should anyone be bothered by this ignorance? After all, one might argue that there are plenty of official-sector initiatives, aimed at building a stronger infrastructure for international capital markets, of which the private sector is barely aware, and that is just how it should be. The driver of a car, after all, needs to know little about the underlying engineering that makes the vehicle move efficiently. The question then, is whether the private sector’s ignorance of S&C is any different from this. If not, fine. If it is different, it might be worth asking why the private sector chooses not to embrace the S&C exercise more enthusiastically.