Dietrich Domanski Speaks on FSB Focus Areas for Remainder of the Year
The FSB Secretary General Dietrich Domanski updated the Asia Securities Industry and Financial Markets Association (ASIFMA) Board on key issues that FSB will work on for the remainder of the year. The key focus areas are expected to be disciplined completion of the outstanding financial reform priorities of G20; rigorous evaluation of implemented reforms to ensure that the reform program is efficient, coherent, and effective; and vigilant monitoring to identify, assess, and address new and emerging risks.
To complete the outstanding financial reforms, FSB intends to operationalize the 2017 recommendations to address structural vulnerabilities from asset management. To this end, IOSCO will issue a consultation with proposals for developing comparable leverage measures for funds. Additionally, FSB will deliver, to the Buenos Aires summit, an assessment to determine whether there is a need for any additional guidance on financial resources to support central counterparty (CCP) resolution and on the treatment of CCP equity in resolution.
With respect to the post-implementation evaluation of reforms, two evaluations are currently underway. One is looking at the effects of the reforms on financial intermediation. The other evaluation is on the interaction of reforms on the incentives for market participants to centrally clear over-the counter derivatives. This is taking place in coordination with the relevant standard-setting bodies, particularly the BCBS review of the effects of the leverage ratio on client clearing. In early part of the third quarter, FSB will launch consultations on the two ongoing evaluations of FSB.
FSB will also issue a draft cyber security lexicon, which is meant to support communication between the private sector and authorities by establishing a common language on cyber risks. The periods for the consultations are expected to be short—about a month each—to facilitate completion of this work in time for the G20 Summit. He highlighted that the financial stability implications of technological innovation would be a major area for monitoring emerging risks. Such assessments of vulnerabilities by FSB inform the policy discussions within FSB and the joint early warnings exercise with IMF. He added that he is "keen to hear as active participants in markets what risks you see in the next 12-18 months?"
Related Link: Remarks (PDF)
Keywords: International, Banking, Securities, Post Implementation Review, Financial Intermediation, CCP Resolution, Cyber Risk, FSB
Previous Article
ISDA Publishes Two Consultations on Benchmark FallbacksRelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards