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. The implementation timelines for the policy recommendations for the framework of numerical haircut floors will be extended to January 2022 (instead of end of 2018) for bank-to-non-bank transactions and to January 2024 (instead of end of 2019) for non-bank-to-non-bank transactions. The implementation timelines for other recommendations remain unchanged.
As part of the work to enhance the resilience of non-bank financial intermediation, FSB had developed 18 policy recommendations to address financial stability risks that arise from SFTs such as repos and securities lending. These recommendations were published in the August 2013 report titled "Policy Framework for Addressing Shadow Banking Risks in Securities Lending and Repos" and updated in the November 2015 report titled "Regulatory framework for haircuts on non-centrally cleared securities financing transactions." Although FSB member jurisdictions are making progress in implementing these policy recommendations, the implementation has seen significant delays in some jurisdictions, especially for the recommendations on the minimum haircuts standards for non-centrally cleared SFTs used by banks to provide financing to non-banks. These delays mainly stem from the new date for implementing the minimum haircut standards on bank-to-non-bank SFTs into banking regulation as part of the Basel III framework, which is now January 2022. FSB has, therefore, decided to adjust these implementation timelines for its policy recommendations. FSB will continue to monitor implementation of its policy recommendations for SFTs to address financial stability risks in the SFT markets and to enhance the resilience of non-bank financial intermediation.
Keywords: International, Banking, Securities, Securities Financing Transactions, Haircuts, Shadow Banking, Basel III, Financial Stability, FSB, Implementation Timeline, Policy Recommendations, Market Based Finance, FSB
Previous ArticleDNB Revises Interest Rate Risk Report for Banks
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.
ECB published Decision 2021/752 to amend Decision 2019/1311 on the third series of targeted longer-term refinancing operations or TLTRO III.
The Central Bank of Ireland published Version 2.7 of the draft credit data template and rules for monthly AnaCredit reporting by banks.
OSFI proposed revisions to the Basel Capital Adequacy Reporting (BCAR) and leverage requirements returns for the 2023 reporting, with the comment period ending on July 09, 2021.
EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates.