This article was co-authored with Abhi Ravishankar and Joel McKay In a much anticipated development, Treasury has released for consultation its exposure draft on Australian financial service (AFS) license exemptions for foreign financial services providers (FFSPs) (the exposure draft Bill and explanatory memorandum can be found here). This consultation comes off the back of the previous … Continue Reading
The Australian Securities and Investments Commission (ASIC) has published a media release to confirm that the current transitional licensing relief for foreign financial services providers (FFSPs) providing financial services to Australian wholesale clients has been extended for a further 12 months to 31 March 2025. FFSPs who held the benefit of “sufficient equivalence relief” under certain ASIC class … Continue Reading
While the Financial Accountability Regime Bill 2023 (Cth) (Bill)is still before the Senate, APRA and ASIC (Regulators) have already released draft Regulator rules for consultation. The Regulator rules provide some guidance on what APRA considers a key function for the purposes of assigning responsibility to ‘accountable persons’. If passed by Parliament, the Bill will establish … Continue Reading
In this latest edition of Regulation Around the World we review the position regarding recovery and resolution for banks. Following the 2008 global financial crisis, the G20 leaders endorsed at the Cannes Summit in November 2011, the Financial Stability Board’s Key Attributes of Effective Resolution Regimes for Financial Institutions as the international standard for resolution … Continue Reading
On 6 July 2023, the Basel Committee on Banking Supervision (Basel Committee) published a consultive document on core principles for effective banking supervision (the Core Principles). The Core Principles are the de facto minimum standards for the sound prudential regulation and supervision of banks and banking systems. They are universally applicable and accommodate a range … Continue Reading
In many jurisdictions there has been heightened regulatory scrutiny on how financial institutions are dealing with borrowers in financial difficulty. When looking at the statements and criticisms’ that the regulators have made and what institutions themselves have self-identified, the issues may revolve around five key themes – vulnerable customers, due diligence/understanding customers, forbearance, communications and … Continue Reading
On 7 June 2023, the Bank for International Settlements (BIS) issued a press release concerning the meeting that the Basel Committee on Banking Supervision (Basel Committee) had on 6 June 2023. At this meeting the Basel Committee took stock of recent market developments and risks to the global banking system. It also discussed various policy … Continue Reading
On 25 May 2023, a group of central banks, together with the Bank for International Settlements, published a paper on central bank digital currencies (CBDC): ongoing policy perspectives. Since publishing (i) a report in October 2020 setting out the common foundational principles and core features of a CBDC, and (ii) an executive summary and three … Continue Reading
The month March was a busy month which saw some significant developments in the financial services sector. Notably, ASIC is currently consulting on class orders about financial requirements in considering whether to remake certain class orders. The regulator is also consulting on ‘sunsetting’ class orders changing responsible entities and equal treatment. ASIC also granted conditional … Continue Reading
On 12 April 2023, the Financial Stability Board (FSB) published a letter from its Chair, Klaas Knot, to G20 Finance Ministers and Central Bank Governors, ahead of their meeting on 12-13 April. The letter discusses the recent turmoil in the banking sector and touches on its recommendations to address increasing cyber threats. Mr Knot notes … Continue Reading
On 30 March 2023, the Basel Committee on Banking Supervision published updated a Technical Amendment document containing various technical amendments and FAQs. The Technical Amendment document contains proposed amendments to the Basel Framework relating to the: The deadline for comments on the proposed amendments is 15 May 2023. The Basel Committee has also finalised a … Continue Reading
On 23 March 2023, the Basel Committee on Banking Supervision (Basel Committee) announced a range of policy and supervisory initiatives, following a meeting on 14 March and 22-23 March to take stock of recent market developments and risks to the global banking system. Following the meeting, the Basel Committee announced the following:… Continue Reading
On 14 December 2022, the Basel Committee on Banking Supervision published a report on the evaluation of the impact and efficacy of the Basel III reforms. This report provides the Committee’s first holistic evaluation of the impact and efficacy of the Basel III reforms and how they have affected bank resilience and systemic risk as … Continue Reading
On 24 November 2022, the Bank for International Settlements (BIS) published a newsletter on bank exposures to non-bank financial intermediaries. The newsletter highlights the following: The non-bank financial intermediary (NBFI) sector continues to grow and has the potential to cause financial stability concerns, though its size and the associated risk vary amongst member jurisdictions. Recent … Continue Reading
On 21 November 2022, the Financial Stability Board (FSB) published the 2022 list of globally systemically important banks (G-SIBs). The list is based on end-2021 data and an assessment methodology designed by the Basel Committee on Banking Supervision, which was revised in 2018. The revised methodology is applied for the first time this year. The … Continue Reading
On 13 September 2022, the Basel Committee on Banking Supervision (BCBS) published a press release following a meeting of the Group of Central Bank Governors and Heads of Supervision (GHOS) reaffirming their expectation to implement Basel III in full and work as fast as possible; provide direction on future work on climate-related financial risks and … Continue Reading
On 8 February 2022, the Basel Committee on Banking Supervision (Basel Committee) published a speech by its Chair, Pablo Hernández de Cos, entitled ‘Implementing Basel III’. Key points in the speech include: An open global financial system requires a set of global minimum and consistent prudential standards. A failure to achieve this could result in … Continue Reading
On 10 December 2021, the Council of the Islamic Financial Services Board (IFSB) adopted two new standards: IFSB-23: Revised Capital Adequacy Standard for Institutions offering Islamic Financial Services (IIFS). IFSB-23 was developed to align the IFSB’s guidance on capital adequacy for the banking sector with the latest updates to global capital standards, particularly those issued … Continue Reading
On 16 December 2021, the Financial Stability Board (FSB) published the Global Monitoring Report on Non-Bank Financial Intermediation 2021. The report presents the results of the FSB’s annual monitoring exercise to assess global trends and risks in non-bank financial intermediation (NBFI). In contrast to the trend over the past decade, the NBFI sector grew less … Continue Reading
On 13 December 2021, the Financial Stability Board (FSB) published a paper on the execution of bail-in. Bail-in is at the core of resolution strategies for global systemically important banks (G-SIBs). Set out in the Key Attributes of Effective Resolution Regimes for Financial Institutions, it is an important tool enabling an orderly resolution that minimises … Continue Reading
On 7 December 2021, the Financial Stability Board (FSB) published its 2021 Resolution Report. The Resolution Report takes stock of the progress made in implementing the FSB resolution policies and enhancing resolvability across the banking, financial market infrastructure, and insurance sectors. It also sets out the FSB’s priorities in the resolution area going forward. Looking … Continue Reading
On 23 November 2021, the Financial Stability Board (FSB) published the 2021 list of global systematically important banks (G-SIBs) using end-2020 data and an assessment methodology designed by the Basel Committee on Banking Supervision (Basel Committee). FSB member authorities apply the following requirements to G-SIBs: Higher capital buffer. The G-SIBs have been allocated to buckets … Continue Reading
On 16 November 2021, the Basel Committee on Banking Supervision (BCBS) issued a public consultative document titled Principles for the effective management and supervision of climate-related financial risks. The BCBS reports that a review of the existing Basel Framework has concluded that while the ‘Core Principles for Effective Banking Supervision’ (Core Principles) and the ‘Supervisory … Continue Reading
On 1 November 2021, the Financial Stability Board (FSB) published its progress report, ‘Enhancing the Resilience of Non-Bank Financial Intermediation’, which was delivered to G20 Leaders ahead of their Summit last weekend. This report details the progress over the past year and the planned work set out by the FSB alongside, standard-setting bodies and other … Continue Reading
