February 10, 2019

While speaking at the BIS Special Governors Meeting in Hong Kong, Randal K. Quarles, the Chair of FSB and Vice Chair of FED, discussed his views on how the work of FSB must evolve and the key principles that, he believes, should inform that work. He mentioned the considerable contribution of FSB toward the post-crisis Basel III reforms and highlighted that FSB is addressing risks from non-bank financial intermediation through greater monitoring and policy measures.

Next, he moved on to outline the few core principles that should guide the FSB work going forward:

  • Improve outreach and transparency—including to the membership, other global authorities, the public, and key stakeholders
  • Ensure that the assessment of vulnerabilities is based on cutting-edge thinking and a disciplined methodology
  • Work toward continual, critical analysis of the effects of regulation, with an eye to making useful improvements where possible

FSB Chair discussed the role, worldwide representation, and effectiveness of the six Regional Consultative Groups (RCGs) of FSB that bring together FSB members with about 70 additional jurisdictions (in addition to the already existing 24 FSB member jurisdictions). He announced that, for the first time in the FSB history, FSB will shortly publish its work program to the public, to provide full picture of the issues that plan to be investigated over the coming year. To further improve outreach, he announced that the FSB public consultation period will now be at least 60 days, as opposed the earlier short consultation timelines that limit the ability for true exchange. He added that FSB has decided to undertake a review of its framework for assessing vulnerabilities to ensure that FSB is at the cutting edge of financial stability vulnerability assessment. This work will be undertaken by a committee charged with assessing vulnerabilities under the leadership of FSB Vice Chair Klaas Knot of the Dutch National Bank (De Nederlandsche Bank). This should be a framework that starts from first principles and benefits from substantial dialog with nonbanks as well as banks, regulators, and other relevant official bodies.

With respect to the evaluation of the post-crisis reforms, Mr. Quarles emphasized that one public measure of whether the review process is effective will be whether FSB recommends any improvements or revisions on the basis of the review. In any system as complex and consequential as the body of post-crisis financial regulations, there will always be aspects—and sometimes material aspects—that can be improved on the basis of experience and analysis. A credible review process that is both rigorous and dispassionate will find a few improvements. He then mentioned that FSB is engaged in work examining the effects of reforms on the financing of small and medium enterprises, which are the lifeblood of many economies worldwide. FSB will consult publicly on the findings of this evaluation in June, ahead of the G20 Summit in Osaka. He also informed that FSB is in the process of launching an important study on the effects of reforms aimed at ending too-big-to-fail. This evaluation is being led by Claudia Buch, vice president of the Deutsche Bundesbank.

 

Related Link: Speech

Keywords: International, US, Banking, Insurance, Securities, Randal Quarles, Post Crisis Reforms, NBFI, Work Program, FSB, BIS

Related Articles
News

US Agencies Adopt Rule to Exclude Community Banks from Volcker Rule

US Agencies (CFTC, FDIC, FED, OCC, and SEC) adopted a final rule to exclude community banks from the Volcker Rule, in line with amendments to certain sections of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

July 22, 2019 WebPage Regulatory News
News

US Agencies Adopt Amendments to Simplify Regulatory Capital Rules

US Agencies (FDIC, FED, and OCC) adopted a final rule that reduces regulatory burden by simplifying several requirements in the regulatory capital rules for banks.

July 22, 2019 WebPage Regulatory News
News

IA of Hong Kong Delegates Inspection and Investigation Powers to HKMA

HKMA and IA of Hong Kong jointly issued a statement announcing the delegation of the inspection and investigation powers of IA to HKMA, pursuant to the statutory regulatory regime for insurance intermediaries under the Insurance Ordinance.

July 19, 2019 WebPage Regulatory News
News

FSB Extends Implementation Timeline for Policy Recommendations on SFTs

FSB announced adjustments to the implementation timelines for its recommendations on securities financing transactions (SFTs), specifically those related to the minimum haircut standards for non-centrally cleared SFTs.

July 19, 2019 WebPage Regulatory News
News

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

EBA published answers to six questions under the Single Rulebook question and answer (Q&A) tool this week.

July 19, 2019 WebPage Regulatory News
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3482