FSB published a summary of the Plenary meeting in Paris. At the meeting, the Plenary reviewed vulnerabilities in the global financial system, fintech developments (including developments in the crypto-asset markets), ongoing work of FSB, and the work program for 2020. The timelines for the publication of certain reports related to the ongoing FSB work were also announced.
The following are the key highlights and conclusions of the meeting:
- FSB plans to publish, by the end of the year, a report that assesses vulnerabilities associated with leveraged loans and collateralized loan obligations (CLOs).
- Members reviewed progress on the development of a new surveillance framework and discussed the key parameters of the new framework, which FSB plans to complete in mid-2020.
- FSB will publish a consultative report on regulatory issues of stablecoins in April 2020.
- Members discussed the ongoing work on market developments and potential financial stability implications from the entry of bigtech firms into finance and from third-party dependencies in cloud services. FSB will publish initial reports on these key topics in the coming weeks.
- The Plenary welcomed the completion of the final version of the holistic framework for assessment and mitigation of systemic risk in the insurance sector, which IAIS will publish next week, following an earlier stakeholder consultation.
- FSB work program for 2020 will be published toward the end of 2019 and the priorities of the work program include addressing new and emerging vulnerabilities in the financial system, harnessing the benefits of financial innovation while containing risks, finalizing and operationalizing post-crisis reforms, and monitoring the implementation and evaluating the effects of the reforms.
Related Link: Press Release
Keywords: International, Banking, Insurance, Fintech, Collateralized Loan Obligations, Financial Stability, Systemic Risk, Work Program, IAIS, FSB
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
Next ArticleUS Agencies Propose to Amend Swap Margin Rule
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED released hypothetical scenarios for a second round of stress tests for banks.
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.
FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).
EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.