Featured Product

    Klaas Knot of FSB Outlines Its Regulatory and Supervisory Priorities

    April 30, 2019

    While speaking at an IMF-IIF (Institute of International Finance) meeting in Washington DC, the DNB President and FSB Vice Chair Klaas Knot discussed the future agenda for financial sector reforms, financial stability, and regulatory developments for the financial industry. After taking stock of the state of the international financial sector, Mr. Knot outlined the key technological changes that will shape the financial sector and the regulatory and supervisory priorities of FSB.

    Mr. Knot discussed important challenges to the current financial system in the from of Brexit and technological innovation in the form of fintech. He also highlighted that, through their direct and indirect exposures, financial institutions, including banks, face potential technological and policy shocks as a result of climate change. This is evident from the results of the climate stress test that the Dutch central bank conducted last year. While examining the challenges posed by fintech, he mentioned that such developments could lead to new operational risks, including the growing adoption of cloud services, which could lead to concentration and systemic risks. He added that technological innovation is leading to changes in the structure of the value chain of banking services, pressuring the existing business models. He then outlined various scenarios that can develop in this context namely integration of banks with fintech firms, new types of cooperation and partnerships between these firms, and increased competition as bigtechs might pose challenge to the existing banks. FSB carefully monitors and analyzes the effects of these technological developments, said Mr. Knot. 

    Next, the FSB Vice Chair examined regulatory implications of the growing role of the non-bank financial intermediaries in the financial system, highlighting that there are unanswered questions about potential systemic risks originating from the unregulated sector. "This may lead to a mispricing of risks, or new interconnections within the financial system. These structural trends will shape the financial landscape and the business model of banks," said Mr. Knot. Finally, he highlighted the following priorities that will determine the reform agenda for the financial sector over the coming years:

    • FSB will continue focus on effective implementation of the post-crisis G20 reforms. This includes efforts to minimize specific national elements that would undermine the level playing field and international harmonization. 
    • FSB will further enhance its role in risk identification. The Standing Committee on Assessment of Vulnerabilities will strengthen its surveillance framework to facilitate a structured and in-depth monitoring of potential risks to the global financial system. FSB will continue monitoring non-bank financial intermediation, which would benefit from enhanced data collection, improved risk analysis, and identifying appropriate policy measures.
    • FSB will continue its work on the evaluation of reforms, after policy measures have been given a reasonable amount of time to take effect. Policymakers can assess whether the reforms have achieved their intended goals and whether there are any unintended consequences. FSB is evaluating the impact of the reforms on small and medium enterprise (SME) financing, to determine whether the enhanced capital regulation has affected lending to SMEs. FSB also recently started an evaluation of the policies to address the too-big-to-fail banks.  This evaluation will look at the effects of higher risk buffers, intensified supervision, and the resolution framework to reduce the potential failure of systemic banks and enable an orderly resolution when necessary.
    • FSB will strengthen its outreach to non-member jurisdictions and strengthen its communication and transparency toward external stakeholders. Strengthening the consultation process and improving information-sharing would contribute to stronger stakeholder involvement, thus improving the work and understanding of international reforms.

     

    Related Link: Speech

    Keywords: International, Banking, Insurance, Securities, Fintech, Financial Stability, Bigtech, FSB Priorities, DNB, FSB, BIS

    Related Articles
    News

    EC Regulation Sets Out Standards for Reporting and Disclosure of MREL

    EC published the Implementing Regulation 2021/763 that lays down implementing technical standards for supervisory reporting and public disclosure of the minimum requirement for own funds and eligible liabilities (MREL).

    May 12, 2021 WebPage Regulatory News
    News

    APRA Decides to Standardize Submission Date for Quarterly Reporting

    APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.

    May 11, 2021 WebPage Regulatory News
    News

    ECB Working Group Publishes Recommendations on EURIBOR Fallbacks

    The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).

    May 11, 2021 WebPage Regulatory News
    News

    Bundesbank Publishes Supporting Documentation for Reporting by Banks

    Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.

    May 11, 2021 WebPage Regulatory News
    News

    EBA Publishes Phase 1 of Reporting Framework 3.1

    EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).

    May 10, 2021 WebPage Regulatory News
    News

    APRA to Finalize Capital Adequacy Standard Revisions by January 2022

    Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA

    May 10, 2021 WebPage Regulatory News
    News

    ESMA Issues Guidelines on Outsourcing to Cloud Service Providers

    ESMA published the final guidelines on outsourcing to cloud service providers.

    May 10, 2021 WebPage Regulatory News
    News

    EBA Publishes Data on Deposit Guarantee Schemes

    EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.

    May 10, 2021 WebPage Regulatory News
    News

    OSFI Sets Out Plan for Future Guidance on Managing Technology Risk

    OSFI has set out the schedule for release of draft guidance on the management of technology risks by federally regulated financial institutions and private pension plans.

    May 10, 2021 WebPage Regulatory News
    News

    MAS Updates Housing Loan Rules, Proposes Corporate Governance Guidance

    MAS updated rules for new housing loans by banks and finance companies.

    May 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6962