Featured Product

    Agustín Carstens of BIS Speaks About New Role of Central Banks

    March 14, 2019

    While speaking at the 20th anniversary conference of the Financial Stability Institute (FSI), Agustín Carstens, the General Manager of BIS, highlighted the need for regulatory actions in light of the continued evolution of financial technology. He began by discussing the challenges arising from the assumption of financial stability responsibilities by central banks and then examined the impact of recent technological developments on the relevant policy framework and the role of financial-sector authorities. Finally, he also discussed the planned role of FSI in addressing the challenges at hand.

    He highlighted that the recent technological developments further complicate the framework in which central banks and supervisory authorities should perform their responsibilities. The challenge for policymakers is, naturally, to maximize the benefits of fintech while minimizing risks to the financial system. He emphasized that, to move forward, authorities need to:

    • Develop a comprehensive understanding of the fintech businesses in their jurisdiction
    • Carefully consider the need to adjust the regulatory perimeter to accommodate new entities or activities to ensure adequate control of risks and a level playing field
    • Coordinate regulatory actions at the global level to the extent possible
    • Embrace technology, keeping in mind that the recent advances in artificial intelligence and its practical application in machine learning, natural language processing, and other advanced analytic capabilities have provided opportunities for developing tools to enhance supervisory capacity

    Mr. Carstens noted that recent developments point to an emerging need for regulatory actions. The actions should be proportionate, holistic and, ideally, internationally coordinated. The central banks and supervisory authorities should continue to focus on their core functions related to financial stability and adequate market functioning. He also added that technological developments have strengthened the case for the independence of central banks and supervisory authorities. Independent regulators could be in a better position to take time-consistent actions and pay due attention to different scenarios to ensure that new technologies develop in an orderly way without undermining financial stability. He further discussed that BIS is determined to contribute substantially to the objectives: to develop a comprehensive and integrated analysis of economic and financial stability and to incorporate, in the policy analysis and decision-making processes, all relevant implications of technological innovation for the financial system. He then described several elements of "Innovation BIS 2025," which is the new medium-term strategy of BIS:

    • To continue the efforts to develop a conceptually integrated framework for financial stability policies
    • To take several initiatives to better understand the implications of technological developments for the financial system and help stakeholders to make effective use of them in their own policy formation 
    • To strengthen the efforts to contribute to the dissemination of good policy practices, to support capacity-building, and to facilitate interaction among regulators

    Mr. Carstens mentioned that FSI will play a key role in several of these initiatives. FSI can contribute to the efforts of financial-sector authorities to address the new challenges by facilitating the dissemination of information and analysis on relevant topics and by fostering the exchange of practices and experiences among supervisors. Mr. Carstens further stated that FSI will create a repository of technology-related regulatory developments. In addition, it will continue developing comparative studies on distinct regulatory and supervisory approaches followed in different jurisdictions. Finally, FSI will further develop a recently created informal network of technology specialists in supervisory organizations to exchange practices and experiences on technological developments. 

     

    Related Link: Speech

     

    Keywords: International, Banking, Financial Stability, Proportionality, Fintech, Regtech, Suptech, FSI, BIS

    Related Articles
    News

    EBA Single Rulebook Q&A: Second Update for September 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to three questions.

    September 13, 2019 WebPage Regulatory News
    News

    PRA Revises Branch Return and Updates Guidance for Regulatory Reports

    PRA published the policy statement PS17/19, which contains the final policy related to changes in the format and content of the Branch Return Form and reporting guidance.

    September 12, 2019 WebPage Regulatory News
    News

    ECB Publishes Version 1.5 of AnaCredit Validation Checks

    ECB published Version 1.5 of the AnaCredit validation checks.

    September 12, 2019 WebPage Regulatory News
    News

    FINMA Outlines Treatment of Stablecoins in Supplement to Guide on ICO

    FINMA published a supplement to its initial coin offerings (ICOs) guidelines, outlining the treatment for stablecoins under the Swiss supervisory law.

    September 11, 2019 WebPage Regulatory News
    News

    FCA and BoE Issue Updates on Brexit Preparations for Financial Sector

    FCA and BoE published important information to help regulated firms in preparing for Brexit.

    September 11, 2019 WebPage Regulatory News
    News

    Ursula von der Leyen Presents Structure of Next European Commission

    President-elect Ursula von der Leyen has presented her team and the new structure of the next European Commission.

    September 10, 2019 WebPage Regulatory News
    News

    FED Proposes to Revise and Extend Reporting Form on Systemic Risk

    FED proposed to extend for three years, with revision, the Banking Organization Systemic Risk Report (FR Y-15; OMB No. 7100-0352).

    September 10, 2019 WebPage Regulatory News
    News

    EBA Issues Revised List of Validation Rules for Reporting

    EBA published the revised list of validation rules (version 2.9) in its implementing technical standards on supervisory reporting.

    September 10, 2019 WebPage Regulatory News
    News

    Bundesbank Publishes Supplementary Validation Rules for Reporting

    Bundesbank published the updated document containing supplementary validation rules in the context of the implementation of the reporting system at national level.

    September 10, 2019 WebPage Regulatory News
    News

    APRA Licenses Xinja Bank as Authorized Deposit-Taking Institution

    APRA granted Xinja Bank Limited a license to operate as an authorized deposit-taking institution without restrictions, under the Banking Act 1959.

    September 09, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3807