On 25 September 2015, the Financial Stability Board (FSB) met in London to discuss the progress in its ongoing work plan. Amongst other things, the FSB discussed:

  • market liquidity and asset management. The FSB has been working to identify risks associated with market liquidity and asset management activities in the current market conditions, as well as potential structural sources of vulnerability associated with asset management activities. The FSB will evaluate in the first phase of its work the role that existing or additional activity-based policy measures could play in mitigating potential risks, and make policy recommendations as necessary;
  • ending too big to fail. Last year the FSB consulted on a proposal for a global standard for total loss-absorbing capacity (TLAC) to be applied to global systemically important banks to address the risk of tax-payer funded bail-outs. At the FSB meeting, members discussed the TLAC impact assessments, and agreed the draft final principles and the updated term sheet. The TLAC standard and its timelines will be finalised by the time of the G20 Summit in November 2015;
  • transforming shadow banking into resilient market-based finance. The members agreed the approach for applying the FSB framework of numerical haircut floors to non-bank-to-non-bank securities financing transactions. It was noted that the final framework will be published shortly with an implementation date by the end of 2018;
  • Members discussed the findings of a thematic peer review of over-the-counter derivatives trade reporting, which include recommendations to address legal barriers to the reporting of comprehensive data, as well as other challenges in the quality and completeness of the data being reported to trade repositories and the ability of authorities to access and use this data. A final report of this review will be published next month; and
  • progress on the misconduct work plan. The FSB reviewed progress on its coordinated work plan to reduce misconduct risk and discussed potential next steps to advance the work plan in 2016. In particular members took stock of the role of incentives, such as compensation, corporate governance frameworks and regulatory enforcement, in reducing misconduct.

View Meeting of the Financial Stability Board in London on 25 September, 25 September 2015