Featured Product

    FSB Report Examines Ways to Address Market Fragmentation

    June 04, 2019

    FSB published a report that examines market fragmentation arising from regulatory and supervisory policies and identifies several work areas to address this issue. The report focuses on instances where reducing market fragmentation might have a positive impact on financial stability or might improve market efficiency, without any detrimental effect on financial stability. The report was delivered to G20 Finance Ministers and Central Bank Governors ahead of their meetings in Fukuoka on June 08–09, 2019.

    In response to a proposal by the Japanese G20 Presidency, FSB explored issues around market fragmentation and considered tools to address them, where appropriate. The report looks at some examples of financial activities where supervisory practices and regulatory policies may give rise to market fragmentation. It discusses potential trade-offs that authorities have considered between the benefits of increased cross-border activity and a need to tailor domestic regulatory frameworks to local conditions and mandates. Areas the report examines include the following:

    • Trading and clearing of over-the-counter (OTC) derivatives across borders
    • Banks’ cross-border management of capital and liquidity
    • Sharing of data and other information internationally

    The report lays out approaches and mechanisms that may enhance the effectiveness and efficiency of international cooperation and help to mitigate any negative effects of market fragmentation on financial stability. The report identifies several areas for further work to address market fragmentation and will review the progress on the work in November 2019. The identified work areas are expected to facilitate further analysis and discussion of approaches and mechanisms for more efficient and effective cross-border cooperation among authorities. Such areas for further work include the following:

    • Exploring ways to, where justified, enhance the clarity of deference and recognition processes in derivatives markets
    • Strengthening the understanding of approaches by supervisory and resolution authorities towards pre-positioning of capital and liquidity by international banks
    • Considering ways to enhance supervisory communication and information sharing, including approaches and mechanisms to avoid future fragmentation
    • Considering whether there is evidence of market fragmentation with observed consequences for financial stability as part of the FSB’s ongoing evaluation of the effects of too-big-to-fail reforms

     

    Related Links

    Keywords: International, Banking, Securities, Market Fragmentation, G20, Financial Stability, Cross-Border Activities, OTC Derivatives, Too Big to Fail, FSB

    Related Articles
    News

    EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation

    The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).

    May 23, 2022 WebPage Regulatory News
    News

    EBA Publishes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.

    May 23, 2022 WebPage Regulatory News
    News

    EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance

    The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks

    May 20, 2022 WebPage Regulatory News
    News

    EC Publishes Results on Review of Web Accessibility Directive

    The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.

    May 19, 2022 WebPage Regulatory News
    News

    NGFS Report Explores Quantification of Climate Risk Differentials

    The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations

    May 19, 2022 WebPage Regulatory News
    News

    MAS Consults on Adjustment Spreads for Conversion of SOR Contracts

    The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.

    May 18, 2022 WebPage Regulatory News
    News

    OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities

    The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.

    May 17, 2022 WebPage Regulatory News
    News

    EBA Proposes Standards to Support Secondary NPL Markets

    The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.

    May 17, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).

    May 13, 2022 WebPage Regulatory News
    News

    EBA Issues Standards for Crowdfunding Service Providers Under ECSPR

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.

    May 13, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8206