The Financial Stability Board (FSB) has published a letter from its chair Randal Quarles to G20 finance ministers and central bank governors ahead of their meetings in Washington this week and the message from the letter is largely the same as it has been for some time – work is progressing but more needs to be […]
The Financial Stability Board (FSB) has appointed Ryozo Himino, vice minister for international affairs at the Japanese Financial Services Agency, as chair of the its standing committee on supervisory and regulatory cooperation (SRC), for a two-year term. He started on 1 September 2019 and succeeds Norman Chan, chief executive of the Hong Kong Monetary Authority, […]
A decade after it was tasked with driving reform of the financial system, the Financial Stability Board (FSB) has reported to G20 leaders that while much has been achieved, “promoting global financial stability is a continuous task”. In a letter to the leaders, current FSB chair Randal Quarles says that the FSB’s transition from determined […]
A report issued this week by the Financial Stability Board (FSB) warns that differences between regional and national regulation is heightening the risk of market fragmentation, thus making it harder for global regulators to monitor markets and for global market participants to operate efficiently across borders. The report states, “Differences in rule-making could lead to […]
The Futures Industry Association (FIA) has filed a response to the Basel Committee on Banking Supervision urging the adoption of FIA’s suggested modification to the leverage ratio and to recognise the exposure-reducing nature of client collateral in order to align regulatory incentives.
Central clearing of derivatives was a key pillar of the G20 countries response to the post-2008 financial crisis reforms to reduce systemic risk in the financial system, however FIA argues that to date, the leverage ratio’s failure to recognise collateral has had a direct negative impact on the ability of banks to provide clearing services to customers.
The Financial Stability Board (FSB) has also published an overview of responses to its public consultation on its Recommendations for national supervisors: Reporting on the use of compensation tools to address potential misconduct risk (Recommendations), which it launched in May.
Overall the board says it received 11 responses from associations representing supervisors, banks, a research foundation, trade associations and a trade union.
Generally, it says, most respondents voiced support for efforts to promote good conduct, improve culture and reduce the incidence of misconduct at financial institutions.
The Financial Stability Board (FSB) has published its finalised Recommendations for national supervisors: Reporting on the use of compensation tools to address potential misconduct risk. The work started in 2015 when the FSB published its Workplan on Measures to Reduce Misconduct Risk through the promotion of incentives for good behaviour.
This work promoted the adoptions of standards and codes of behaviour, such as the FX Global Code, and reforms to benchmark-setting practices; A toolkit of measures to address misconduct in wholesale markets developed by the International Organization of Securities Commissions (IOSCO), based on national approaches; additional guidance on the use of compensation tools to promote good conduct; and a toolkit to strengthen governance frameworks to mitigate misconduct risk.
The Financial Stability Board (FSB) has issued two reports studying the implementation of its reform programme for OTC derivatives markets and says that “good progress” continues to be made across its agenda.
Studying the period from end-June 2017, the report concludes that 21 out of 24 FSB member jurisdictions have comprehensive trade reporting requirements in force, up by two since end-June 2017. The three to yet put the reporting frameworks in place are Argentina, South Africa and Turkey, however the FSB says the three have made “some progress” in that period, particularly Turkey.
The Financial Stability Board (FSB) today published Crypto-asset markets: Potential channels for future financial stability implications. The report sets out the analysis behind the FSB’s proactive assessment of the potential implications of crypto-assets for financial stability. The report includes an assessment of the primary risks present in crypto-assets and their markets, such as low liquidity, the use of leverage, market risks from volatility, and operational risks. Based on these features, crypto-assets lack the key attributes of sovereign currencies and do not serve as a common means of payment, a stable store of value, or a mainstream unit of account, says the report.
In a new report to the G20, the Financial Stability Board (FSB) has concluded that “cryptoassets do not pose a material risk to global financial stability at this time”.
While this is a welcome boost for the crypto industry, the FSB does make clear that these assets should be vigilantly monitored by authorities going forward.
As such, the FSB has requested that the Standing Committee on Assessment of Vulnerabilities (SCAV) and the Committee on Payments and Market Infrastructures (CPMI) work jointly to develop a framework for monitoring the financial stability risks related to cryptoassets with a focus on identifying potential metrics that can be used to measure these risks.