The Financial Stability Board (FSB) has published a speech given by its Secretary General, Svein Andresen. The speech was given at the Chatham House Banking Revolution Conference and covered the FSB’s work on the G20 reforms and fintech.
Key points in the speech include:
- a key pillar of the post financial crisis reforms is to ensure that too-big-to-fail financial institutions can be resolved without public funded bail-outs. The jurisdictions in which the global systemically important banks (G-SIBs) are headquartered now have in place resolution regimes with bail-in powers. Progress has also been made in the area of cross-border recognition of resolution action, including through contractual stays on early termination of financial contracts. G-SIBs now face, and very largely meet, higher capital requirements than other banks, and they are supervised more intensively. However, substantial work still remains to operationalise resolution plans for cross-border firms;
- the FSB has made good progress in its work on several fintech innovations. It has considered the financial stability implications of distributed ledger technology and continues to work with the Bank for International Settlements (BIS) to identify key issues that market participants and policy makers need to address. The FSB is conducting an in-depth study of the financial stability implications of peer to peer lending with the BIS. The FSB is also beginning work to understand the financial implications of machine learning;
- the FSB is conducting stocktakes with the Basel Committee on Banking Supervision of the work their respective members have done at the national level on fintech issues. This has covered members’ experimentation with distributed ledger technology and what they have learned, as well as experiences with innovation facilitators – sandboxes, hubs and accelerators; and
- national authorities should be vigilant and should actively monitor the effects that fintech innovations have on specific products and services, as well as on incumbent financial institutions, financial markets and the economy more broadly.
View FSB speech on global regulatory developments and their industry impact, 3 November 2016