FSB Workshop Discusses Preliminary Findings of Too-Big-To-Fail Reforms
FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms. FSB has published the workshop agenda and the related presentation documents, one of which is the presentation given by Claudia Buch on the preliminary findings of the too-big-to-fail evaluation. Claudia M. Buch is the Vice President of Deutsche Bundesbank and Chair of the FSB evaluation working group on the effects of too-big-to-fail reforms. Ms. Buch highlighted that the indicators of systemic risk and moral hazard have moved in the right direction post the reforms but there are still gaps that need to be addressed.
Ms. Buch highlighted that capital ratios of systemically important banks increased by more than those of other banks but their profitability has fallen relative to other banks, reflecting higher capital, lower risk, and higher funding costs. Moreover, the complexity of global banks remains high. Overall, the implementation of resolution reforms has progressed and stakeholders consider resolution to be more credible. However, there are still gaps to be addressed. Obstacles to resolution can be reduced further, as state support for failing banks has continued and resolution of central counterparties is work in progress. In addition, information transparency and monitoring can be enhanced. All stakeholders would benefit from closing information gaps. Risks from shift to non-bank financials also need to be monitored.
As part of its program to examine the effects of post-crisis financial reforms agreed by G20, FSB is carrying out an evaluation of too-big-to-fail reforms for banks. The evaluation is being chaired by Ms. Buch and is assessing whether the implemented reforms are reducing the systemic and moral hazard risks associated with systemically important banks. It is also examining the broader effects of the reforms to address too-big-to-fail for systemically important banks on the overall functioning of the financial system. In June 2020, FSB consulted on a report setting out the preliminary results of the evaluation. The deadline for providing feedback on the consultation report is September 30, 2020. This recent virtual workshop included presentations and discussions by a range of academic, regulatory, non-governmental organization and industry stakeholders on the analysis and findings of the evaluation. The workshop and the written responses to the consultation will inform the final evaluation report, which will be published in early 2021.
Related Links
Keywords: International, Banking, To Big to Fail, Systemic Risk, Resolution Framework, D-SIBs, G-SIBs, FSB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Blake Coules
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Related Articles
ECB Further Reviews Costs and Benefits Associated with IReF
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
IOSCO Welcomes Work on Sustainability-Related Corporate Reporting
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
EBA Publishes Funding Plans Report, Receives EMAS Certification
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
BoE Allows One-Day Delay in Statistical Data Submissions by Banks
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
ACPR Amends Reporting Module Timelines Under EBA Framework 3.2
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
APRA to Modernize Prudential Architecture, Reduces Liquidity Facility
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.
PBC Issues List of Systemic Banks, Adds 2 Foreign Banks to CERB List
The China Banking and Insurance Regulatory Commission (CBIRC) published the administrative measures for internal control of wealth management companies, which come into force on the day of promulgation.
PRA Publishes Discussion Paper on Its Future Approach to Policy
The Prudential Regulation Authority (PRA) proposed its approach to policy-making as it takes on wider rulemaking responsibilities under the Financial Services and Markets Bill.
ECB Publishes Opinion on Proposed Regulation on Data Act
The European Central Bank (ECB) published its opinion on the proposal for a regulation on harmonized rules on fair access to and use of data (Data Act).
