The Financial Stability Board (FSB) has issued a press release following its plenary meeting in Frankfurt on 26 March 2015. At the plenary meeting FSB members discussed a number of key topics including:
- emerging markets forum. The FSB discussed issues related to implementation, home-host, proportionality and sequencing raised by emerging market and developing economies. These included issues related to Basel III, over-the-counter derivatives reforms, resolution, macro-prudential policies in emerging markets, concerns about reduced availability of correspondent banking services and the continued need to make local capital markets deeper and more resilient as well as sovereign debt restructuring processes. The FSB will work with international financial institutions to consider how they can best incorporate the issues raised into their work plans;
- market liquidity and asset management. The FSB agreed a work plan to identify financial stability risks associated with market liquidity in fixed income markets and asset management activities, as well as longer-term structural financial stability issues that may arise. This work will evaluate the role that existing or additional activity-based policy measures could play in mitigating potential risks, and make policy recommendations as necessary. The FSB will discuss its initial findings at its meeting in September 2015;
- market-based finance. The FSB reviewed the consultative responses received on the proposed application of numerical haircut floors to non-bank-to-non-bank securities financing transactions. The standards will be finalised by September 2015;
- ending too-big-to-fail. The FSB took note of the responses to its public consultation on policy proposals to enhance the total loss-absorbing capacity of global systemically important banks in resolution and reviewed progress in impact assessment studies. The FSB reports that the new standard will be finalised in time for the G20 summit in November 2015. In addition, to fully realise the financial stability benefits of clearing through central counterparties (CCPs), the FSB has agreed a work plan to promote CCP resilience, recovery planning and resolvability;
- market misconduct. To address misconduct risks, the FSB reviewed a work plan that will examine: (i) how the incentives created by reforms to risk governance, compensation structures and benchmarks have helped reduce misconduct and whether any additional measures are needed; (ii) whether steps are needed to improve standards of conduct in the fixed income, commodities and currency markets; and (iii) together with the World Bank and other relevant bodies, the extent of potential withdrawal from correspondent banking, its implications for financial exclusion, as well as possible steps to address this issue; and
- implementation monitoring. The FSB discussed the draft outline of the consolidated annual report to the G20 on the implementation and effects of financial regulatory reforms. The report will be published at the time of the G20 summit in November 2015.
View FSB Plenary meets in Frankfurt, Germany, 26 March 2015