Featured Product

    FSB Report Examines Ways to Address Market Fragmentation

    June 04, 2019

    FSB published a report that examines market fragmentation arising from regulatory and supervisory policies and identifies several work areas to address this issue. The report focuses on instances where reducing market fragmentation might have a positive impact on financial stability or might improve market efficiency, without any detrimental effect on financial stability. The report was delivered to G20 Finance Ministers and Central Bank Governors ahead of their meetings in Fukuoka on June 08–09, 2019.

    In response to a proposal by the Japanese G20 Presidency, FSB explored issues around market fragmentation and considered tools to address them, where appropriate. The report looks at some examples of financial activities where supervisory practices and regulatory policies may give rise to market fragmentation. It discusses potential trade-offs that authorities have considered between the benefits of increased cross-border activity and a need to tailor domestic regulatory frameworks to local conditions and mandates. Areas the report examines include the following:

    • Trading and clearing of over-the-counter (OTC) derivatives across borders
    • Banks’ cross-border management of capital and liquidity
    • Sharing of data and other information internationally

    The report lays out approaches and mechanisms that may enhance the effectiveness and efficiency of international cooperation and help to mitigate any negative effects of market fragmentation on financial stability. The report identifies several areas for further work to address market fragmentation and will review the progress on the work in November 2019. The identified work areas are expected to facilitate further analysis and discussion of approaches and mechanisms for more efficient and effective cross-border cooperation among authorities. Such areas for further work include the following:

    • Exploring ways to, where justified, enhance the clarity of deference and recognition processes in derivatives markets
    • Strengthening the understanding of approaches by supervisory and resolution authorities towards pre-positioning of capital and liquidity by international banks
    • Considering ways to enhance supervisory communication and information sharing, including approaches and mechanisms to avoid future fragmentation
    • Considering whether there is evidence of market fragmentation with observed consequences for financial stability as part of the FSB’s ongoing evaluation of the effects of too-big-to-fail reforms

     

    Related Links

    Keywords: International, Banking, Securities, Market Fragmentation, G20, Financial Stability, Cross-Border Activities, OTC Derivatives, Too Big to Fail, FSB

    Related Articles
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    News

    HKMA to Increase Focus on Suptech and Regtech Cloud Adoption

    HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.

    June 17, 2021 WebPage Regulatory News
    News

    EC Consults on Improving Transparency in Secondary Markets for NPLs

    EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).

    June 16, 2021 WebPage Regulatory News
    News

    BIS and Nordic Central Banks Launch Innovation Hub in Stockholm

    BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked

    FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.

    June 16, 2021 WebPage Regulatory News
    News

    EC Releases Sustainable Finance Taxonomy Compass

    EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    EIOPA to Consider Liquidity Risk in Stress Test for 2021

    EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.

    June 15, 2021 WebPage Regulatory News
    News

    ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending

    The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.

    June 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7116