On March 10, the Financial Stability Board (FSB) launched an initiative to encourage adherence to international cooperation and information exchange standards in both the financial regulatory and supervisory areas.
According to the FSB, “financial markets are global in scope and, therefore, weaknesses in cooperation and information exchange can undermine the efforts of regulatory and supervisory authorities to ensure that laws and regulations are followed and that the global operations of the financial institutions for which they have responsibility are adequately supervised.” This initiative is designed to identify non-cooperative jurisdictions and provide assistance in improving their adherence to the international financial standards. Responding to a call by the G20 leaders at their April 2009 London Summit to take action against non-cooperative jurisdictions, the initiative is to similar initiatives by the Global Forum on Transparency and the Organisation for Economic Co-operation and Development, which promote international adherence in tax.
The process to evaluate adherence will evaluate compliance with international financial standards and identify areas for improvement. To foster adherence, the FSB will consider a “tool box” of measures to promote adherence, including policy dialogues, technical assistance, market incentives, restrictions on transactions by international financial institutions, and suspension of membership privileges.