Featured Product

    Claudia Buch of Bundesbank on Evaluating Financial Sector Reforms

    June 12, 2017

    Claudia Buch, Deputy President of the Deutsche Bundesbank, took part in the panel discussion on "Improving Financial Resilience," at the T20 Summit "Global Solutions" in Berlin on May 30, 2017. She discussed the evaluation of effectiveness of financial sector reforms as a joint task for academia and policymakers, based on transparency, international coordination, and independent assessments.

    She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

     

    She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

     

    Related Link: Speech (PDF)

    Keywords: International, BIS, Financial Reforms, Bundesbank, Regulatory Reform, Banking, Securities, Insurance



    She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

     

    She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

     

    Related Link: Speech (PDF)

    She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

     

    She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

     

    Related Link: Speech (PDF)

    She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

     

    She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

     

    Related Link: Speech (PDF)

    She discussed the proposed framework of FSB for evaluating financial reforms and highlighted that an effective framework for evaluation of post-crisis financial sector reforms is lacking at the global level. Policy evaluation needs to be part of a structured policy process involving four steps: specifying the objectives of reforms, defining intermediate targets, calibrating instruments and assessing the expected impact, and assessing the impact post implementation. This is the gap that the FSB framework is about to close. It is about answering the question of whether the reforms have achieved their intended outcomes, whether they work together as intended, and whether they have had material unintended consequences. Such side effects may have to be addressed, but without compromising on the objectives of the reforms or by reducing resilience. The framework provides a common understanding of the elements required for a “good” policy evaluation and it will provide a basis for an informed and evidence-based discussion on regulatory policies. To address challenges of policy evaluation, she suggests investigating whether a reform caused an outcome (attribution), whether a reform had similar effects across markets and jurisdictions (heterogeneity), and whether it achieved its overall objective (general equilibrium).

     

    She also emphasized that both academics and policymakers would benefit from engaging in better policy evaluations. Academia could engage in developing methodologies and in studying designs that contribute to societal welfare, without compromising on academic rigor. Policymakers could draw on the rich expertise that is available and make better use of existing infrastructures. Moreover, some of the mechanisms that have been developed in academia to mitigate misaligned incentives and ensure transparency are readily applicable to policy evaluations. She said that policy evaluation means being transparent about the goals of regulatory policies and what these policies have actually achieved. Setting standards, learning from good practices, and international coordination are also vital. The FSB, in coordination with international standard setting bodies, can play an important role in this regard. "Its proposal for a framework for policy evaluation comes at the right time and addresses the right issues." Finally, she also looked at the need for independent, objective assessments to obtain an unbiased picture on the effects of reforms, highlighting that appropriate institutional arrangements such as peer reviews, independence from policy groups, and direct reporting lines need to be in place.

     

    Related Link: Speech (PDF)

    Related Articles
    News

    EBA Updates List of Validation Rules for Reporting by Banks

    EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.

    September 10, 2020 WebPage Regulatory News
    News

    EBA Responds to EC Call for Advice to Strengthen AML/CFT Framework

    EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).

    September 10, 2020 WebPage Regulatory News
    News

    NGFS Advocates Environmental Risk Analysis for Financial Sector

    NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.

    September 10, 2020 WebPage Regulatory News
    News

    MAS Issues Guidelines to Promote Senior Management Accountability

    MAS published the guidelines on individual accountability and conduct at financial institutions.

    September 10, 2020 WebPage Regulatory News
    News

    APRA Formalizes Capital Treatment and Reporting of COVID-19 Loans

    APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.

    September 09, 2020 WebPage Regulatory News
    News

    SRB Chair Discusses Path to Harmonized Liquidation Regime for Banks

    SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.

    September 09, 2020 WebPage Regulatory News
    News

    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.

    September 09, 2020 WebPage Regulatory News
    News

    ECB Updates List of Supervised Entities in EU in September 2020

    ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.

    September 08, 2020 WebPage Regulatory News
    News

    OSFI Identifies Focus Areas to Strengthen Third-Party Risk Management

    OSFI published the key findings of a study on third-party risk management.

    September 08, 2020 WebPage Regulatory News
    News

    FSB Extends Implementation Timeline for Framework on SFTs

    FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.

    September 07, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5796