FSB published a letter from the Chair Randal K. Quarles to the G20 finance ministers and Central Bank governors ahead of the meetings in Riyadh on February 22-23. The letter sets out key deliverables during the Saudi Arabian G20 Presidency. The key FSB priorities for 2020 will be related to the London Inter-bank Offered Rate (LIBOR) transition, certain key issues in the technological arena, regulatory issues around stablecoins, improvements in cross-border payments, and work in the area of non-bank financial intermediation, among others.
The letter notes that the global financial system is constantly facing new challenges. Technology is changing the nature of traditional finance; the non-bank sector has grown and requires deeper understanding and coordination among the supervisory and regulatory community. Pressures that can lead to market fragmentation exist. Concurrently, important supervisory and regulatory issues require attention. Against this backdrop, the focus areas for FSB’s work for the Saudi Arabian G20 include the following:
- FSB welcomes the increased G20 focus on the issue of LIBOR transition and will publish reports on this transition in July and December.
- Building on the work published last year, FSB will provide a report on the implications of the provision of financial services by bigtechs for emerging market and developing economies. The G20 Presidency has also asked FSB to submit a report on the range of practices in the use of regtech and suptech.
- FSB is resolved to quicken the pace of developing the necessary regulatory and supervisory responses to these new instruments. It will issue a draft report on regulatory issues and possible responses for public consultation in April.
- Recognizing the importance of efficient and inclusive payment services for global growth, the Saudi G20 Presidency has requested FSB to coordinate the development of a roadmap for improving cross-border payments. FSB will deliver this roadmap to the G20 in October.
- FSB is considering what work is appropriate and whether to reorganize the existing work on non-bank financial intermediation. This is due to the new vulnerabilities that may arise from growth in this sector. Non-bank financial intermediation now accounts for roughly half of the global financial assets.
- In June, FSB will publicly consult on its report on the evaluation of the post-crisis regulatory framework to assess the extent to which too-big-to-fail reforms are reducing the systemic and moral hazard risks associated with systemically important banks. FSB will also deliver its annual report on the progress in implementation of these reforms ahead of the G20 Summit.
Keywords: International, Middle East and Africa, Saudi Arabia, Banking, Bigtech, Suptech, Regtech, Stablecoins, G20, Benchmark Reforms, Regtech, Cyber Risk, Too Big to Fail, FSB
The Australian Prudential Regulation Authority (APRA) released an update on the timelines for revisions to the market risk prudential standards and the implications for the broader capital framework.
Three global standard-setters launched a joint consultation that reviews the margining practices during the COVID-19 pandemic and identifies potential areas for further policy work.
The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.
The European Banking Authority (EBA) published the final draft regulatory technical standards on gross jump-to-default amounts and on residual risk add-on under the Capital Requirements Regulation or CRR.
The Financial Conduct Authority (FCA) published the final rules on the Investment Firms Prudential Regime (IFPR) to streamline and simplify the prudential requirements for solo-regulated UK firms authorized under the Markets in Financial Instruments Directive (MiFID).
The European Supervisory Authorities (ESAs) have delivered to the European Commission (EC) the final report on the draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR).
The European Banking Authority (EBA) published an advice to the European Commission (EC) on funding in resolution and insolvency as part of the review of the crisis management and deposit insurance (CMDI) framework.
The Financial Stability Oversight Council (FSOC) released a report in response to the U.S. President's Executive Order on climate-related financial risk.
The Bank for International Settlements (BIS) published a paper that examines the business models and the associated risks posed by big technology firms foraying into financial services sector.
The Bank for International Settlements (BIS) announced the development of an Asian Green Bond Fund, in collaboration with the development financing community, to channel global central bank reserves to green projects in Asia Pacific.