FSB has published recommendations for the enhanced supervision of systemically important financial institutions (SIFIs). The report notes key legislative initiatives designed to reduce the probability and effects of SIFI failure, such as Basel III, but says policy alone cannot deliver the necessary changes. FSB has made 31 recommendations, many of which draw on the Basel Core Principles, under the headings of:

  • mandates;
  • independence;
  • resources;
  • supervisory powers;
  • improved techniques (this heading includes 10 recommendations including regulators focusing on outcomes, board assessments and business models);
  • group-wide and consolidated supervision;
  • continuous and comprehensive supervision;
  • supervisory colleges, homes/host;
  • macro-prudential surveillance, multi-disciplinary approach (forward looking);
  • use of third parties; and
  • concluding recommendations.

FSB says that although it made its recommendations with SIFIs in mind, regulators should apply them as appropriate to other regulated institutions.