The Financial Stability Board (FSB) has published a letter that it has sent to G20 Finance Ministers and Central Bank Governors.
In relation to finalising the remaining post-crisis reforms the FSB refers to three areas: completion of the capital framework for banks; measures to help end too-big-to-fail; and initiatives to make derivatives markets safer.
In relation to ending too-big-to-fail the FSB notes that it:
- is reviewing the consultation responses on the proposal for total loss absorbing capacity (TLAC) published last November, and that various TLAC impact assessment studies are well underway. Work is on track to finalise an international standard by the Antalya summit;
- has reviewed steps to finalise policy measures for statutory and contractual approaches to cross-border recognition of resolution actions following a recent public consultation. As part of this initiative, work is underway to promote broad adoption of contractual recognition clauses to make temporary stays in respect of early termination rights effective in a cross-border context;
- is taking further steps this year to end too-big-to-fail for financial entities other than banks. In particular, the FSB published in March a second consultative paper on methodologies to identify non-bank, non-insurer global systemically important institutions;
- is pursuing with the Committee on Payments and Market Infrastructures (CPMI), the International Organization of Securities Commissions (IOSCO) and the Basel Committee on Banking Supervision a coordinated work plan to promote central counterparty resilience, recovery planning and resolvability; and
- has agreed a work plan to take forward, with CPMI and IOSCO, the standardisation and aggregation of over-the-counter (OTC) derivatives trade reporting data.
In relation to making derivatives markets safer the FSB states that it has agreed a work plan to take forward, with the CPMI and IOSCO, the standardisation and aggregation of OTC derivatives trade reporting data. This is intended to identify where legal and other blockages to the reporting, sharing and aggregation of key information regarding trades need to be removed.