Featured Product

    Jaime Caruana of BIS Speaks on Challenges After Post-Crisis Reforms

    September 18, 2017

    Jaime Caruana, General Manager of BIS, spoke about the supervisory policy implementation in the current macro-financial environment, at a conference of the Financial Stability Institute Conference in Basel, Switzerland. He highlighted the importance of effective implementation of the post-crisis global regulatory reforms. He then discussed the three dimensions of policy implementation: adopting new standards in a proper, consistent and timely way; assessing whether standards, once implemented, achieve their objectives; and putting in place supervisory frameworks that maximize the benefits of new standards.

    Since the early stages of designing the current reforms, there have been significant efforts to assess their potential impact. As these reforms are being implemented, more valuable information is becoming available to assess whether the new rules are working as intended and whether they generate adverse unintended effects. These can include the excessive shift of risks toward less regulated areas, the reduced liquidity in some securities markets, or the retrenched provision of correspondent banking services to some countries. Such assessments require a comprehensive and inter-sectoral approach to grasp the whole range of effects that the new standards could generate. The comprehensive analysis should build on the extensive impact assessments conducted by each standard-setter. The next logical step is to systematically conduct and generalize these types of assessments. FSB, in cooperation with the relevant standard-setters, has recently launched a methodological framework for the evaluation of the  post-crisis reforms. In this context, two elements seem to be critical.  

     

    To maximize the benefits of new standards, supervisors must take a more comprehensive approach to address the build-up of vulnerabilities at financial institutions. Mr. Caruana explains that supervisory intervention needs to be more proactive and highlights that supervisory priorities and practices are becoming more forward-looking. He also discussed the need for policy interventions (by conduct of business supervisors and prudential supervisors), arising from developments in the area of financial technology (fintech). He then cited the example of the recent Basel Committee public consultation on the implications of fintech for the financial sector. The effectiveness of policy actions can only be achieved through international cooperation among national authorities. One key aspect of this cooperation is the exchanges of practices and experiences among regulators and supervisors to help ensure that sound policy approaches are adopted worldwide. He believes that FSI can support the standard-setters in this regard and should continue to play a key role in promoting the adoption of good policy practices across jurisdictions. This work goes well beyond the dissemination of standards. It also includes, as the FSI is now doing, facilitating information-sharing and providing analysis that helps financial sector authorities to identify the appropriate policy approaches. 

     

    Related Link: Speech (PDF)

    Keywords: International, Banking, Securities, Insurance, Policy Implementation, Post-Crisis Reforms, Financial Stability, BIS

    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629