FSB published an update on the meeting of its Regional Consultative Group (RCG) for Americas. The meeting took place in Cayman Islands and the key topics of discussion included financial market developments, effects of regulatory reforms, fintech, and crypto-assets.
Members of the RCG for Americas began the meeting with a discussion on global and regional macroeconomic and financial market developments. The financial system is substantially more resilient in the region as a result of regulatory reforms, with large banks less leveraged and more liquid than before the global financial crisis. Nevertheless, supervisors are closely monitoring the potential vulnerabilities, including the growth of leveraged loans. FSB will continue to monitor financial stability risks related to high sovereign, corporate, and household debt levels and to assess the resilience of evolving market structures and the impact of technological innovation. The group received an update on the work of FSB in 2018, including reports delivered to the G20 Leaders’ Summit in Buenos Aires and its future work program. The annual report of FSB on the implementation and effects of G20 reforms reports that, 10 years after the crisis, the new regulatory framework is largely in place and implementation is well underway. However, implementation is not yet complete and remains uneven. The work of FSB in 2019 and beyond will focus on finalizing and operationalizing post-crisis reforms; monitoring the implementation and evaluating the effects of post-crisis reforms; and addressing new and emerging vulnerabilities in the financial system.
The group discussed financial sector resilience post the global financial crisis, the implementation of regulatory reforms, and the remaining issues that need to be addressed in the region. It was noted that many jurisdictions in the region that are not members of BCBS had improved macro-prudential frameworks and deposit insurance regimes; however, further steps are still needed, including with respect to the reforms implemented by BCBS members, taking into account proportionality strategies, while achieving full implementation. Members also discussed crypto-assets and the FSB assessment that, while crypto-assets do not pose a material risk to global financial stability at this time, they do raise several broader policy issues in areas such as consumer and investor protection, market integrity, tax evasion, and money laundering/terrorist financing. The discussion then turned more broadly to the use of fintech, its potential to increase financial inclusion, including through digital payments, and the regulatory and supervisory challenges that fintech poses. The meeting ended with a discussion on infrastructure finance as a priority of the Argentine G20 Presidency has been to make infrastructure finance into a new asset class.
Related Link: Meeting Update for Americas
Keywords: Americas, Banking, Insurance, Securities, G20, Regulatory Reforms, Fintech, Crypto-assets, RCG, FSB
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