HM Treasury published an update on the third meeting of the UK-U.S. Financial Regulatory Working Group. The meeting was focused on five key themes: the potential financial stability impact of the COVID-19 crisis, international cooperation and 2021 priorities, cross-border rules and overseas recognition/equivalence/substituted compliance regimes, sustainable finance, and financial innovation. The next Working Group meeting is expected to take place in the first half of 2021.
This Working Group meeting was the first since the withdrawal of UK from EU. Participants included officials and senior staff from the U.S. Department of the Treasury, HM Treasury, and the U.S. and UK independent regulatory agencies, including CFTC, FDIC, FED, OCC, SEC, BoE, and FCA. The following are the key highlights of the meeting:
- Participants discussed the outlook for financial regulatory reforms and future priorities, including possible areas for deeper bilateral and multilateral regulatory cooperation to further facilitate safe and efficient financial services activity between U.S. and UK markets, and provided updates on certain aspects of their respective domestic frameworks.
- Participants took stock of ongoing public- and private-sector efforts in relation to benchmark transition and provided updates on their respective cross-border rules, overseas recognition, equivalence, and substituted compliance regimes. Participants also welcomed the announcement of the signing of a Memorandum of Understanding between BoE and CFTC regarding supervisory cooperation in relation to UK and U.S. central counterparties that operate on a cross-border basis.
- Participants acknowledged the success of this summer’s UK-U.S. Financial Innovation Partnership meeting and discussed further actions to deepen UK and U.S. ties in financial innovation, their respective approaches to digital payments, and cross-border data issues.
- On insurance, participants discussed implementation of the U.S.-UK Covered Agreement, next steps for the U.S.-UK Insurance Project, and the UK and U.S. insurance regulatory responses to the COVID-19 crisis.
- Sustainable finance was also a topic of discussion at the Working Group, with the UK discussing its future priorities, including its climate-related financial sector work and regulatory and supervisory approach to climate change, along with the private sector-led disclosure efforts. U.S. participants outlined private-sector efforts to mitigate climate-related risks.
- Participants also took stock of the Working Group’s achievements to date and recognized that the UK-U.S. financial regulatory relationship and Working Group discussions will be entering a new phase after Brexit transition is complete.
- Participants identified follow-up work for the Working Group on the above topics and other priority issues. Participants will continue to engage bilaterally on these topics as well as other topics of mutual interest ahead of the next Working Group meeting.
Related Link: Joint Statement
Keywords: Europe, Americas, UK, US, Banking, Insurance, Securities, COVID-19, Sustainable Finance, Cross-Border Rules, UK-US Financial Regulatory Working Group, HM Treasury
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.