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

SEC Proposes to Improve Cross-Border Application of SBS Requirements

SEC proposed a package of rule amendments and interpretive guidance to improve the framework for regulating cross-border security-based swaps (SBS) transactions and market participants.

May 24, 2019 WebPage Regulatory News
News

US Agencies Propose to Amend Regulatory Framework for Foreign Banks

US Agencies (OCC, FED, and FDIC) proposed a regulatory framework for foreign banks operating in the U.S. that would more closely match the rules for foreign banks with the risks they pose to the U.S. financial system.

May 24, 2019 WebPage Regulatory News
News

FSB to Evaluate Effects of Too-Big-To-Fail Reforms for Systemic Banks

FSB is seeking feedback as part of its evaluation of the effects of the too-big-to-fail reforms for banks.

May 23, 2019 WebPage Regulatory News
News

OSFI Revises Covered Bond Limit Calculation for Deposit Takers

OSFI is updating the covered bond limit calculation, which was last revised in December 2014.

May 23, 2019 WebPage Regulatory News
News

APRA Releases Minor Changes to Reporting Standards on SA-CCR for Banks

APRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).

May 22, 2019 WebPage Regulatory News
News

APRA on Industry Self-Assessments into Governance and Accountability

APRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).

May 22, 2019 WebPage Regulatory News
News

PRA Consults on Maintenance of TMTP Under Solvency II

PRA published a consultation paper (CP11/19) that sets out its approach to update supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTP) under Solvency II.

May 22, 2019 WebPage Regulatory News
News

EBA Regards Regulatory Framework in Argentina to be Equivalent to EU

EBA published its opinion that the supervisory and regulatory framework applicable to credit institutions in Argentina can be regarded as equivalent to that applied in EU.

May 22, 2019 WebPage Regulatory News
News

RBNZ Reviews Restrictions on Policy for Loan to Value Ratio

RBNZ published a report on the review of the loan to ratio (LVR) restrictions as part of a wider review of the macro-prudential policy.

May 22, 2019 WebPage Regulatory News
News

APRA Proposes to Amend Guidance on Residential Mortgage Lending

APRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.

May 21, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3127