A "don't waste a good financial crisis" moment has arrived. The G-20's Financial Stability Board is set to convene a global workshop on how to create and administer a global identification standard for businesses and their ownership structures involved in the financial supply chain.

This awakening has the potential to reset the plumbing of the global financial industry. More importantly the dots have been connected between the need for a globally unique identification system and systemic risk.

Systemic risk first appeared at the dawning of Wall Street's computerization era. It came in the form of the back office paper crisis that hobbled securities trading at the New York and American Stock Exchanges and closed down brokerage firms and bank trust departments who could not adapt to the new era of modern technology.

It was quickly accepted that a greater level of transparency would be necessary to oversee the financial institutions that were to power the engines of capitalism and globalization that were emerging in the late sixties.

About two decades later, the near collapse of the increasingly electronic U.S.'s stock, futures and options markets again awakened regulators to the lack of transparency. Regulators realized that they had no mechanism to aggregate view the related transactions of all the counterparties across all the interconnected markets.

In 2008 the near collapse of the global financial system, in large part seeded by the unseen parts of financially engineered derivatives products, again exposed regulators to the lack of transparency.

Fast forward to May 2010 when U.S. financial regulators couldn’t trace the catalyst of the "flash crash," a nearly 1000 point 20 minute drop in the Dow index. It was apparent that we hadn't come far in meeting transparency objectives for our financial institutions and their regulators.

Putting aside this lack traceability, the absence of a unique, unambiguous and universal standard for financial market participants has been recognized as one of the key pillars to arming regulators with the ability to sweep across the global financial landscape by automated means and see the contagion of systemic risk building up.

The starting point is agreeing on a standard identification code for every corporate and institutional market participant. Known as the "legal entity identifier," this code is the best hope to enable regulators to see what they are mandated to oversee.

In the U.S. the LEI is being spearheaded by the US Treasury's new Office of Financial Research. While the goal in creating the OFR was systemic risk analysis, it was recognized that without standardized, consistent and more detailed information about the financial transactions created and traded by global financial institutions, no meaningful result could be obtained. Without this regulators would continue to be blind to the risks financial institutions were taking. Lehman made this only too apparent. The Madoff scandal reinforced it.

Now three leading global financial organizations, the Bank for International Settlements, the International Organization of Securities Commissioners, and the Financial Stability Board have all sanctioned the LEI in concept. The FSB, the creation of the G-20 and the global overseer of systemic risk is convening a LEI workshop on September 28 in Basel. They have connected the dots between the LEI and systemic risk. The time has come to take the laudable concept of the LEI and put it into practice.

Bankers and other financial market participants need to participate and send executives at the highest levels. A globally unique identification standard is so fundamental to achieving transparency goals if we are ever to observe the contagion of systemic risk.

Allan D. Grody is the president of Financial Intergroup Holdings Ltd.  He is a founding editorial board member of the Journal of Risk Management in Financial Institutions.