On October 27, 2014, the Financial Stability Board ("FSB") published its report to the G20 on cross-border consistency and global financial stability implications of structural banking reforms. The FSB worked with the International Monetary Fund and the Organization for Economic Co-operation and Development to collect data and perspectives from jurisdictions implementing structural banking reforms and from other jurisdictions that may be impacted by the reforms. The report considers the U.S. Volcker Rule, swaps push-out rule and enhanced prudential standards for foreign banking organizations, the UK ring-fencing laws and approach to foreign branches, the EU proposed regulation following the Liikanen report and reforms implemented in Switzerland, France and Germany. The report concludes that there is consensus that the structural reforms being implemented or proposed aim to support the reforms to reduce systemic risk or improve resolvability of banks. Jurisdictions that are not implementing any structural reforms noted that there may be some negative cross-border implications of the reforms such as reduced liquidity, regulatory arbitrage and risks moving to the shadow banking arena. The FSB intends to update its assessment of the reforms for the G20 for 2016.
The report is available at: http://www.financialstabilityboard.org/publications/r_141027.pdf.