On 26 July 2022, HM Treasury published a joint statement  on the UK-US financial regulatory working group meeting. The meeting was held on 21 July 2022 and participants included officials and senior staff from HM Treasury and the US Department of the Treasury and independent regulatory agencies from both the US and the UK.

The working group meeting focused on seven themes: (1) international bilateral cooperation; (2) benchmark transition; (3) financial innovation; (4) sustainable finance;(5) non-bank financial intermediation; (6) operational resilience; and (7) cross-border regimes.

Some of the key points made at the meeting were as follows:

  • The working group co-chairs highlighted their continued commitment to, and support for, robust financial markets and international financial regulatory standards that promote financial stability and mitigate unintended market fragmentation.
  • Participants discussed risks in the Non-Bank Financial Intermediation (NBFI) sector and interconnectedness with other financial and non-financial actors, as well as the need to take steps toward strengthening the resilience of the sector, including strengthening the liquidity risk management practices. Participants expressed support for future cooperation, including in relevant international fora, in this regard.
  • On Basel II reforms, participants reaffirmed their commitment to the final prudential standards and reiterated the value of global cooperation in their implementation. Participants agreed to discuss further when respective authorities bring forward their implementation proposals.
  • All participants committed to continued cooperation to support safe financial innovation, as well as to strengthen regulatory outcomes for stablecoins across jurisdictions. Participants also considered future opportunities for further discussion on broader crypto-asset regulatory initiatives.
  • The working group noted the importance of maintaining a coordinated approach in the lead up to the cessation of remaining USD LIBOR settings at the end of June 2023.
  • The working group also discussed domestic and international progress made on work relating to sustainable finance this year. For example, US participants discussed work undertaken by US agencies, including as outlined in the US Financial Stability Oversight Council’s Report on Climate-Related Financial Risk. UK participants discussed the Climate Biennial Exploratory Scenario and the UK noted the usefulness of scenario analysis as a tool for supervisory risk assessments and financial institutions. Participants also discussed Environmental, Social, and Governance (ESG) data and ratings providers and provided updates on the development of climate-related financial disclosures regimes.
  • Participants discussed regulatory approaches to ‘critical’ third-party providers, in particular those that provide services across borders and across sectors. They noted the need for financial authorities to understand and manage the financial stability and market confidence risks that could arise as a result of failure of or disruption at third-party providers.

The statement notes that participants will conduct follow-up work on the topics discussed and other issues of mutual interest through bilateral engagement and in multilateral fora ahead of the next working group meeting, which is expected to take place later in 2022.