Yesterday, the Financial Stability Board (FSB) met in Paris to discuss the progress being made in connection with its regulatory reform agenda. TheFSB is an international body formed in 2009 following the 2009 G-20 Summit, which is tasked with devising ways to avoid future financial crises.
The FSB discussed progress on a number of different fronts, including:
- Basel III – The FSB members were in support of the new bank capital and liquidity standards announced this month, although FSB Chairman Mario Draghi said that larger banks need to be subject to even more stringent capital requirements.
- Peer Reviews – Yesterday, the FSB published its peer review on Mexico, the first country peer review completed under the FSB Framework for Strengthening Adherence to International Standards. The peer review on Mexico highlighted several areas for the Mexican regulators’ further review, including the financial capacity of the deposit insurance agency and the strength of the financial supervisory structure and powers. The peer reviews of Italy and Spain are also being undertaken in 2010.
- Regional Outreach – The FSB plans to establish regional groups made up of both member and non-member authorities in order to expand the reach of the FSB. A detailed proposal on such groups will be further discussed at the October FSB Plenary meeting, and the regional groups’ first meetings will take place next year.
In addition, the FSB discussed items for which more comprehensive information will be provided at the G-20 November Summit in Seoul. These included:
- Regulatory treatment of systemically important financial institutions (SIFIs); and
- Central clearing and trade reporting for OTC derivatives.