Jaime Caruana of BIS Speaks on Challenges After Post-Crisis Reforms

By Regulatory News

September 18, 2017

Jaime Caruana, General Manager of BIS, spoke about the supervisory policy implementation in the current macro-financial environment, at a conference of the Financial Stability Institute Conference in Basel, Switzerland. He highlighted the importance of effective implementation of the post-crisis global regulatory reforms. He then discussed the three dimensions of policy implementation: adopting new standards in a proper, consistent and timely way; assessing whether standards, once implemented, achieve their objectives; and putting in place supervisory frameworks that maximize the benefits of new standards.

Since the early stages of designing the current reforms, there have been significant efforts to assess their potential impact. As these reforms are being implemented, more valuable information is becoming available to assess whether the new rules are working as intended and whether they generate adverse unintended effects. These can include the excessive shift of risks toward less regulated areas, the reduced liquidity in some securities markets, or the retrenched provision of correspondent banking services to some countries. Such assessments require a comprehensive and inter-sectoral approach to grasp the whole range of effects that the new standards could generate. The comprehensive analysis should build on the extensive impact assessments conducted by each standard-setter. The next logical step is to systematically conduct and generalize these types of assessments. FSB, in cooperation with the relevant standard-setters, has recently launched a methodological framework for the evaluation of the post-crisis reforms. In this context, two elements seem to be critical.

To maximize the benefits of new standards, supervisors must take a more comprehensive approach to address the build-up of vulnerabilities at financial institutions. Mr. Caruana explains that supervisory intervention needs to be more proactive and highlights that supervisory priorities and practices are becoming more forward-looking. He also discussed the need for policy interventions (by conduct of business supervisors and prudential supervisors), arising from developments in the area of financial technology (fintech). He then cited the example of the recent Basel Committee public consultation on the implications of fintech for the financial sector. The effectiveness of policy actions can only be achieved through international cooperation among national authorities. One key aspect of this cooperation is the exchanges of practices and experiences among regulators and supervisors to help ensure that sound policy approaches are adopted worldwide. He believes that FSI can support the standard-setters in this regard and should continue to play a key role in promoting the adoption of good policy practices across jurisdictions. This work goes well beyond the dissemination of standards. It also includes, as the FSI is now doing, facilitating information-sharing and providing analysis that helps financial sector authorities to identify the appropriate policy approaches.

Related Link: Speech (PDF)

Keywords: International, Banking, Securities, Insurance, Policy Implementation, Post-Crisis Reforms, Financial Stability, BIS

APRA Publishes FAQ on Capital Requirements for Banks and Insurers

IMF Publishes Technical Notes Under FSAP with Japan

Related Insights


News EBA Finalizes Guidelines on the STS Criteria in Securitization EBA published the final guidelines that provide a harmonized interpretation of the criteria for a securitization to be eligible as simple, transparent, and standardized (STS) on a cross-sectoral basis throughout EU. December 12, 2018 WebPage Regulatory News
News OSFI Sets Domestic Stability Buffer for D-SIBs at 1.75% OSFI set the level for the Domestic Stability Buffer at 1.75% of total risk-weighted assets, as calculated under the Capital Adequacy Requirements (CAR) Guideline. December 12, 2018 WebPage Regulatory News
News FSI Publishes Paper on Proportionality in Insurance Solvency Rules FSI published a paper on proportionality in the application of insurance solvency requirements. December 11, 2018 WebPage Regulatory News
News BCBS Updates Framework for Pillar 3 Disclosure Requirements BCBS published the updated framework for Pillar 3 disclosure requirements. December 11, 2018 WebPage Regulatory News
News EBA Issues Revised List of Validation Rules for Reporting EBA revised the list of validation rules in its implementing technical standards on supervisory reporting. December 11, 2018 WebPage Regulatory News
News IMF Reports Assess the Stability of Financial System in Brazil IMF published a report on the results of the Financial System Stability Assessment (FSSA) on Brazil. December 11, 2018 WebPage Regulatory News
News FED Governor Examines Pros of Imposing Capital Buffers on Large Banks At the Peterson Institute for International Economics in Washington D.C., the FED Governor Lael Brainard summarized the financial stability outlook, highlighted areas where financial imbalances seem to be building, and touched on the related policy implications. December 07, 2018 WebPage Regulatory News
News US Agencies Propose Rule on Appraisals for Real Estate Transactions US Agencies (FDIC, FED, and OCC) proposed a rule to increase the threshold level at or below which appraisals would not be required for the residential real estate transactions from USD 250,000 to USD 400,000. Comments will be accepted for 60 days from publication in the Federal Register. December 07, 2018 WebPage Regulatory News
News EBA Single Rulebook Q&A: First Update for December 2018 This week one answer was published as part of the Single Rulebook Questions and Answers (Q&A). December 07, 2018 WebPage Regulatory News
News FED Updates Reporting Form and Instructions for FR Y-14Q FED published the updated reporting form FR Y-14Q for Capital Assessment and Stress Testing, along with the associated instructions. December 06, 2018 WebPage Regulatory News

RESULTS 1 - 10 OF 2325

By Regulatory News

Previous Article

Next Article