FSB published a letter from the Chair Randal K. Quarles to G20 Finance Ministers and Central Bank Governors, ahead of the meetings in Washington D.C. in October. The letter notes that the development of post-crisis reform policies is nearly complete and implementation is well underway; however, the FSB mission is far from complete. Implementation progress on the agreed G20 reforms remains uneven across key reform areas and FSB is in the process of evaluating that reforms are working as intended. Looking ahead, authorities need to be ready to address the evolving risks to global financial stability, be they related to the current downside risks to growth and uncertainties related to Brexit, or the structural changes in the financial system.
The letter highlights three areas of the FSB work:
- Ensuring resilience in the face of new risks. As part of this workstream, FSB is conducting an in-depth analysis of the markets for leveraged loans and collateralized loan obligations. FSB is also assessing the financial stability implications of structural changes in the financial system, including non-bank finance and technological innovation.
- Addressing potential financial stability issues from global stablecoins. FSB has formed a working group, to inform regulatory policy approaches that harness the benefits of financial innovation, while containing associated risks for the financial system, and to advise on multilateral responses as necessary. FSB will submit a consultative report to the G20 in April and a final report in July 2020.
- Promoting a financial system that supports strong and sustainable global growth. Following its June report on addressing instances of harmful market fragmentation, FSB has submitted a progress report to the G20 on its further work in this area. FSB is also taking forward its multi-year program of rigorous evaluation of post-crisis reforms. The evaluation of the effects of the reforms on small and medium-size enterprises is nearing completion, while the evaluation of the effects of too-big-to fail reforms for banks is underway.
Keywords: International, Banking, Securities, Post-Crisis Reforms, G20, Financial Stability, Stablecoins, Too Big to Fail, Fintech, FSB
Previous ArticleSRB and JFSA to Cooperate on Resolution Planning for Banks
BoE published a statistical notice (Notice 2020/9) explaining the approach for treatment of payment holidays on the profit and loss return or Form PL.
BoE updated the known issues document for the statistical reporting Forms AS and FV.
FED announced individual capital requirements for 34 large banks and these requirements go into effect on October 01, 2020.
SRB published a set of documents to give operational guidance to banks on implementation of the bail-in tool.
BIS published an update on the G20 TechSprint Initiative, which was launched in April 2020 and aims to highlight the potential for technologies to resolve regulatory compliance (regtech) and supervisory (suptech) challenges.
OSFI published a letter that provides an update on the milestones for the implementation of the IFRS 17 standard on insurance contracts.
EBA updated the report on the implementation of selected COVID-19 policies.
The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.
BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.