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Press Release – FSB Identifies Priorities for Global Financial Reform
PRESS RELEASE
Tuesday – February 20, 2013
Financial Stability Board (FSB) Identifies Priorities for
Global Financial Reform Agenda
FSB limits priorities to four issues and announces Emerging Market and Developing Economies (EMDE) workshop focused on impact of financial reforms
On February 15-16, the Financial Stability Board (FSB) reported to the G20 Ministers and Central Bank Governors at their meeting in Moscow. Mark Carney, FSB Chairman, submitted a letter to the G20 that contained updates on the implementation of FSB reforms, including Basel III, and identified the FSB’s priorities and work plans going forward. Mr. Carney named four priorities: OTC derivatives reforms, regulation of shadow banking, building resilient financial institutions and ending “too-big-to-fail”. Given the interconnectedness of the global financial system, there is concern that this agenda might be too narrow. Jo Marie Griesgraber, the Executive Director at New Rules for Global Finance, explained:
“The FSB is correct to identify these as priorities, but there are several other issues with strong links to financial stability that should be on the global regulatory agenda. These include sovereign debt and reform of the secondary bond market, macro-prudential policies for capital flows, and cross-border coordination in the regulation of commodity market speculation. Now that the FSB has incorporated and has a stronger institutional footing, it is time for a comprehensive agenda that addresses the major sources of financial instability and market volatility.”
The FSB incorporated in Switzerland in January 2013, giving the institution legal personality and greater institutional capacity. Furthermore, the FSB is planning to review the structure of its representation and to elect new chairs for its Standing Committees according to Mr. Carney’s letter. Dr. Griesgraber added, “We hope that the new chair of the FSB Standing Committee on Assessing Vulnerabilities will lead a thorough review and update of current vulnerabilities affecting the global financial system.”
The FSB also submitted a report to the G20 assessing the impact of FSB regulatory reforms. The report stated, “The regulatory community is vigilant to avoid material unintended consequences and to analyze potential impacts prior to finalization of the reforms.” This ex-ante impact assessment will mark a new approach for the FSB. It has previously published two reports with ex-post impact assessment of financial reforms in EMDEs, most of which are not members of the FSB. Furthermore, the FSB announced that it will be organizing a workshop for EMDEs to share lessons and experiences on implementing agreed financial reforms and on undertaking ex ante assessments of their impact. This workshop is to take place in the first half of 2013. No further details on the workshop were provided.
Dr. Griesgraber encouraged the FSB to make details public promptly, “Affected non-FSB member states are clearly impacted and deserve a voice regarding their successful experiences as well as a review of the possible negative consequences of FSB recommended financial regulations.”
Footnotes:
The Financial Stability Board (FSB) was established in 2009 to develop, coordinate and promote implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability.
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Notes to Editor:
New Rules for Global Finance is a 501(3)c non-profit organization that promotes reforms in the rules and institutions that govern international finance; in order to support just, inclusive and sustainable economic development.
For more information, please visit www.new-rules.org
For more information about our work on the Financial Stability Board, please visit www.fsbwatch.org
Contact:
Nathan Coplin
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810-348-3165
Jo Marie Griesgraber
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202-277-9390