General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
July 19, 2018

FSB published a consultation report on the evaluation of the effects of financial regulatory reforms on infrastructure finance and is seeking public feedback on the results of the evaluation to date. Responses to the questions set out in the consultative document are welcome by August 22, 2018. The final report will be published sometime around the G20 Summit at the end of November 2018.

The evaluation is the first under the FSB framework for the post-implementation evaluation of the effects of the G20 financial regulatory reforms and forms a part of the broader FSB examination of the effects of reforms on financial intermediation. It focuses on infrastructure finance that is provided in the form of corporate and project debt financing (loans and bonds), for which the financial regulatory reforms are of immediate relevance.

The report concludes that the effect of the G20 financial reforms on infrastructure finance is of a second order relative to other factors, such as the macro-financial environment, government policy, and institutional factors. For the reforms that have been largely implemented and are most relevant for this evaluation—namely, the initial Basel III capital and liquidity requirements (agreed in 2010) and over-the-counter derivatives reforms—the analysis thus far does not identify material negative effects on the provision and cost of infrastructure finance. The evaluation further finds that:

  • The overall amount of infrastructure finance has grown in recent years after a temporary drop during the financial crisis. Market-based finance—mainly project and (particularly) corporate bond issuance as well as non-bank financing—has accounted for most of the growth in advanced economies in recent years.

  • Lending spreads for infrastructure finance have returned to lower levels in recent years following a spike during the crisis, but remain above pre-crisis levels.

  • There are differences in the provision of infrastructure finance in emerging markets and developing economies compared to advanced economies. Emerging markets and developing economies tend to rely more on bank loans, have a higher proportion of cross-border financing, and use local currency less for financing purposes.

  • The reforms have contributed to shorter average maturities of infrastructure loans by global systemically important banks. This effect is not necessarily unintended, given that reducing banks’ maturity mismatch was one of the objectives of the reforms.

  • While not analyzing the ex post effects of reforms on financial resilience, the evaluation has found no results to suggest that the wider benefits to the financial system from enhanced resilience do not apply in the narrower context of infrastructure finance.

  • The analysis points to some substitution in recent years of bank financing by market-based financing in advanced economies and the G20 banking reforms may have been one of the drivers for this re-balancing.

 

Related Links

Comment Due Date: August 22, 2018

Keywords: International, Banking, Securities, Regulatory Reform, Market Based Finance, Basel III, OTC Derivatives Reform, FMI, FSB

Related Insights
News

MAS Amends Notice 637 on Capital Adequacy Requirements in Singapore

MAS published the final, revised Notice 637 on the risk-based capital adequacy requirements in Singapore.

November 13, 2018 WebPage Regulatory News
News

ESMA Updates Q&A on Implementation of CSD Regulation and MAR

ESMA updated questions and answers (Q&A) documents on the implementation of the Central Securities Depository (CSD) Regulation and Market Abuse Regulation (MAR).

November 12, 2018 WebPage Regulatory News
News

FSB Finalizes and Publishes the Cyber Lexicon

FSB published a cyber lexicon, following the public consultation earlier this year.

November 12, 2018 WebPage Regulatory News
News

SRB Updates Liability Data Reporting Template for 2019

SRB published version 2.7.1 of the Liability Data Reporting (LDR) Template.

November 12, 2018 WebPage Regulatory News
News

IMF Publishes Reports on the 2018 Article IV Consultation with Chile

IMF published its staff report and selected issues report under the 2018 Article IV consultation with Chile.

November 09, 2018 WebPage Regulatory News
News

PRA Issues PS27/18 on Implementing the Extension of SM&CR to Insurers

PRA published the policy statement PS27/18, which provides feedback to responses to the consultation paper CP20/18, on implementing the extension of the Senior Managers and Certification Regime (SM&CR) to insurers (Part 2).

November 09, 2018 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for November 2018

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

November 09, 2018 WebPage Regulatory News
News

FED Finalizes the Large Financial Institution Rating System

FED finalized the new supervisory rating system for Large Financial Institutions (LFIs), to better align with the current supervisory programs and practices for these firms.

November 09, 2018 WebPage Regulatory News
News

ECB Publishes Guides for Capital and Liquidity Management by Banks

ECB published the guides for capital and liquidity management by banks in EU.

November 09, 2018 WebPage Regulatory News
News

EC Amends Regulation on Prudent Valuation for Supervisory Reporting

EC published the amended Implementing Regulation (EU) 2018/1627 on prudent valuation for supervisory reporting. Regulation 2018/1627 amends the Implementing Regulation 680/2014.

November 09, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2199