FSB letter to G20 leaders reporting on progress of Financial Regulatory Reforms
On 9 November 2010, the Financial Stability Board ("FSB") published a report on progress since the Washington Summit in the Implementation of the G20 Recommendations for Strengthening Financial Stability. The report includes discussion on the following:
(i) New capital and liquidity standards - national implementation of the risk-based capital requirements will begin on 1 January 2013;
(ii) Addressing the moral hazard risk associated with systemically important financial institutions - the FSB has agreed a policy framework, work processes and timelines;
(iii) Supervisory intensity and effectiveness - the FSB states that supervisory authorities must have the ability to detect problems proactively and intervene early. FSB peer reviews and IMF/World Bank FSAP assessments will monitor national implementation;
(iv) OTC derivative reforms - the FSB has set out recommendations for addressing the G20 commitments concerning standardisation, central clearing, organised platform trading, and reporting to trade repositories;
(v) Principles for reducing reliance on CRAs - the FSB calls on standard setters and national regulatory authorities to assess references to CRA ratings in law and regulations and, wherever possible, remove them or replace them by suitable alternative standards of creditworthiness;
(vi) The FSB will monitor and regularly report on the progress of consistent international implementation of financial reforms.
Date
November 9, 2010