The Financial Stability Board (FSB) has published the following reports which relate to its work concerning the oversight and regulation of shadow banking which the G20 endorsed at the Brisbane summit in November 2014:
- progress report on transforming shadow banking into resilient market-based finance;
- global shadow banking monitoring 2016; and
- regulatory framework for haircuts on non-centrally cleared securities financing transactions.
The FSB notes that:
- with regard to system wide monitoring to track developments in the shadow banking system, the FSB this year introduced a new activity-based “economic function” approach in its annual monitoring. The activity-based approach is intended to help authorities detect and assess the sources of financial stability risks from shadow banking in the non-bank financial space, and apply appropriate policy measures where necessary to mitigate these risks;
- with regard to policies to strengthen oversight and regulation of shadow banking, there has been further progress this year, particularly in the area of securities financing. The regulatory framework for haircuts on non-centrally cleared securities financing transactions is now completed with the scope extended to cover securities financing between non-banks;
- the implementation of previously agreed policies is progressing. In the coming year, the FSB and its members will take forward the following work: (i) development of the guidance on the scope of consolidation for bank prudential regulation; (ii) findings on the possible harmonisation of regulatory approaches to re-hypothecation; (iii) implementation monitoring for the policy framework for shadow banking entities; (iv) evaluation of the case for developing further policy recommendations; (v) implementation monitoring for money market funds and securitisation; and (vi) monitoring of the global trends and risks in the shadow banking system.
View FSB publishes reports on transforming shadow banking into resilient market-based finance, 12 November 2015