FSB published a summary of the meeting of the Regional Consultative Group (RCG) in Europe. The meeting was held in Basel. The key topics of discussion included financial vulnerabilities, regulatory and supervisory issues associated with stablecoins, reform of major interest rate benchmarks, the ongoing work and plans of FSB for 2020, joint financial crisis management exercise, and effectiveness of RCGs as an outreach and feedback mechanism.
The following are the key highlights of the discussion:
- Members discussed global and regional financial vulnerabilities, along with the risks from elevated debt levels for many private- and public-sector borrowers in an environment where interest rates are expected to remain lower for longer globally.
- The group discussed the wide range of global regulatory and supervisory issues associated with stablecoins and is looking forward to the public consultation on regulatory issues of stablecoins, which FSB is expected to publish in April 2020.
- Also discussed were the findings of the progress report on reform of major interest rate benchmarks, which FSB will publish next month.
- Members received an update on the ongoing work and plans of FSB for 2020. As part of this update, RCG members also received an update on the ongoing evaluation of too-big-to-fail reforms for systemically important banks.
- The group discussed a joint financial crisis management exercise that had been conducted by Nordic and Baltic authorities in January 2019 to test their preparedness for a financial crisis. Members that participated in the simulation set out the lessons learned and actions they are taking to address issues highlighted by the exercise.
- The group expressed support for a set of recommendations developed by a working group of FSB and RCG members, and adopted by the FSB Plenary last week, to enhance the effectiveness of RCGs as an outreach and feedback mechanism.
Related Link: Press Release
Keywords: Europe, Banking, RCG, Stablecoin, Interest Rate Benchmark, Crisis Management Framework, FSB
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.
The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures
The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.
The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.
The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.
The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.
The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.