FSB published a progress report for G20 Leaders on its workplan to reduce misconduct in the financial sector. The report details the actions taken and recommended by FSB and the standard-setting bodies since FSB’s last progress report in September 2016. It also specifies further steps that are planned to reduce misconduct risk (in Annex) and, thus, strengthen trust in the financial system.
Followed by significant and widespread incidents of misconduct in recent years, FSB agreed on a workplan, in May 2015, to reduce misconduct risks. The report details recent actions taken and recommended by the FSB and the standard-setting bodies and these actions include the following:
Measures to strengthen financial institution governance to reduce misconduct risk, including issuance of consultation on supplementary guidance on the use of compensation tools to address misconduct and publishing of a report that sets out areas of ongoing work to develop a toolkit for supervisors to mitigate misconduct risk
Actions directed at authorities’ capacity to address misconduct risk such as the IOSCO report identifying tools for market regulators to discourage and prevent misconduct in wholesale markets
Actions directed at improving market structures and practices such as strengthening some major interest rate benchmarks to reduce manipulation risk and publishing of a global code of conduct for wholesale foreign exchange markets
Actions to enhance the robustness of market structure and to enhance conduct standards and adherence in markets
Keywords: International, FSB, Misconduct Risk, Compensation, Financial Benchmarks, G20, Banking, Governance Framework
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