November 20, 2018

FSB published the final report on the evaluation of the effects of financial regulatory reforms on infrastructure finance. This final report follows a public consultation earlier this year. For the reforms that have been largely implemented and are most relevant for this evaluation—namely, the initial Basel III capital and liquidity requirements (agreed in 2010) and over-the-counter derivatives reforms—the analysis does not identify material negative effects on the provision and cost of infrastructure finance to date. FSB also published an overview of responses to the public consultation, which summarizes the issues raised in the public consultation and sets out the main changes that have been made in the evaluation report to address them.

While the G20 reforms do not specifically target the provision of infrastructure finance, a broad range of financial regulations can potentially affect it. This reflects the diverse nature of infrastructure finance, involving different types of financial intermediaries and instruments. The reforms that have been largely implemented and are most relevant for this evaluation are the initial Basel III capital and liquidity requirements (agreed in 2010) and over-the-counter (OTC) derivatives reforms. Both sets of reforms were subject to qualitative and quantitative analyses. Other G20 reforms that may be relevant for infrastructure finance but are at an earlier implementation stage (for example, Basel III reforms finalized in December 2017, investment funds reforms accounting standards) are reviewed qualitatively, given the lack of data required for a quantitative assessment. In addition to the G20 reforms, national and regional regulations for insurers (for example, differentiated treatment of infrastructure assets introduced recently into Solvency II and in some other jurisdictions) and pension funds (for example, investment limits) may affect infrastructure finance and these regulations have also been considered qualitatively.

The report first defines relevant concepts and describes the overall structure and trends in infrastructure finance by financial market participants. It then outlines the relevant reforms potentially affecting infrastructure finance, along with their implementation timelines and possible transmission channels. Finally, it presents the results of the qualitative and empirical analysis on the effects of reforms on infrastructure finance and concludes by providing an overall assessment of the effects of reforms on infrastructure finance. The report also includes annexes with additional information on the market structure and trends in infrastructure finance (Annex A); regulations that are potentially relevant for this type of finance (Annex B); empirical analysis (Annex C); analysis of the qualitative survey responses (Annex D); stylized analysis of changes in regulatory capital to the cost of bank-based infrastructure finance (Annex E); and review of the relevant literature (Annex F).

The evaluation is among the first under the FSB framework for the post-implementation evaluation of the effects of the G20 financial regulatory reforms and forms part of a broader FSB examination of the effects of reforms on financial intermediation. It focuses on infrastructure finance that is provided in the form of corporate and project debt financing (loans and bonds), for which the financial regulatory reforms are of most immediate relevance.

 

Related Links

Keywords: International, Banking, Insurance, Securities, Regulatory Reforms, Infrastructure Finance, Basel III, Solvency II, Market Based Finance, OTC Derivatives, FSB

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476