June 12, 2017

Claudia Buch, Deputy President of the Deutsche Bundesbank, took part in the panel discussion on "Improving Financial Resilience," at the T20 Summit "Global Solutions" in Berlin on May 30, 2017. She discussed the evaluation of effectiveness of financial sector reforms as a joint task for academia and policymakers, based on transparency, international coordination, and independent assessments.

She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

 

She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

 

Related Link: Speech (PDF)

Keywords: International, BIS, Financial Reforms, Bundesbank, Regulatory Reform, Banking, Securities, Insurance



She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

 

She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

 

Related Link: Speech (PDF)

She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

 

She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

 

Related Link: Speech (PDF)

She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

 

She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

 

Related Link: Speech (PDF)

She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

 

She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

 

Related Link: Speech (PDF)

Related Articles
News

BIS Report Discusses Regulatory Issues Related to Big Techs in Finance

BIS has pre-released a chapter of the BIS Annual Economic Report; this chapter focuses on the risks and opportunities presented by large technology firms (big techs) in the financial services sector.

June 23, 2019 WebPage Regulatory News
News

IOSCO Report Examines Liquidity in Corporate Bond Markets

IOSCO published a report that examines the factors affecting liquidity, under stressed conditions, in the secondary corporate bond markets.

June 21, 2019 WebPage Regulatory News
News

FED Publishes Results of the 2019 Stress Tests for Banks

FED published a report presenting results of the Dodd-Frank Act Stress Test (DFAST) exercise for 2019.

June 21, 2019 WebPage Regulatory News
News

BCBS Report Examines Global Pillar 2 Supervisory Review Practices

BCBS published a report that examines the Pillar 2 supervisory review practices and approaches in Basel member jurisdictions.

June 21, 2019 WebPage Regulatory News
News

IASB Publishes Work Plan and Meeting Updates for June 2019

IASB published an updated work plan and a summary of its June meeting, which presents preliminary decisions of the Board.

June 21, 2019 WebPage Regulatory News
News

HKMA Publishes Banking Exposure Limits Code Under Banking Ordinance

HKMA issued a circular to all authorized institutions informing that the Banking (Exposure Limits) Code has been published in the Gazette on June 21, 2019.

June 21, 2019 WebPage Regulatory News
News

OSFI Proposes Guideline on Internal Model Oversight for Insurers

OSFI proposed the draft guideline E-25 on the internal model oversight framework for federally regulated property and casualty (P&C) insurance companies.

June 21, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for June 2019

Under the Single Rulebook question and answer (Q&A) updates for this week, EBA published one answer regarding the calculation of institution-specific countercyclical capital buffer rates.

June 21, 2019 WebPage Regulatory News
News

BCBS Publishes Summary of the Meeting in June 2019

BCBS published a summary of its June meeting in Basel.

June 20, 2019 WebPage Regulatory News
News

OCC Bulletin on Risk Management Guidance for Home Mortgage Lending

OCC published Bulletin 2019-28 on risk management guidance for higher-loan-to-value (LTV) lending activities in communities targeted for revitalization.

June 19, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3298