FSB consults on recapitalization requirements for G-SIBs. The Financial Stability Board issued for public consultation policy proposals on the adequacy of loss-absorbing and recapitalization capacity of global systemically important banks (G-SIBs). Once finalized, the new standard will provide the minimum requirements for “total loss-absorbing capacity” to ensure that G-SIBs have sufficient capacity to absorb losses, both before and during resolution. Comments should be submitted by February 2, 2015. (11/10/2014) FSB press release.
FSB progress report on OTC derivatives reform. The Financial Stability Board published its eighth progress report on implementation of OTC derivatives market reforms. (11/7/2014) FSB press release.
Global systemically important firms named. The Financial Stability Board and the Basel Committee published an updated list of global systemically important banks. The list remains unchanged from last year. (11/6/2014) See FSB G-SIB abstract. The Basel Committee released supporting information, including a technical summary which further explains the methodology and the denominators used for calculations. (11/6/2014) BIS press release. Separately, the FSB identified for 2014 the nine global systemically important insurers (G-SIIs) identified in 2013 and postponed a decision on the G-SII status of reinsurers. (11/6/2014) FSB G-SII press release.
FSB progress report on compensation practices. The Financial Stability Board published its third progress report on the implementation of its principles for sound compensation practices. It finds that the adoption of sound principles is essentially complete. (11/4/2014) FSB abstract.
FSB publishes global shadow banking report. The Financial Stability Board published its fourth annual “Global Shadow Banking Monitoring Report.” The report presents data as of end-2013 from 25 jurisdictions and the euro area as a whole. The report notes that the hedge fund sub-sector remains significantly underestimated in the FSB’s data collection exercise. Further refinement of the data for this sector could provide important additions to future editions of the report. (11/4/2014) FSB abstract.
Basel Committee publishes Net Stable Funding Ratio. The Basel Committee on Banking Supervision issued the final standard for the Net Stable Funding Ratio (NSFR), which requires banks to maintain a stable funding profile in relation to their on- and off-balance sheet activities. The NSFR will become a minimum standard by January 1, 2018. The Committee is currently developing disclosure standards for the NSFR and expects to publish them for consultation around year end. (10/31/2014) BIS press release.
IOSCO releases updated OTC clearing requirements. The International Organization of Securities Commissions updated its information repository for central clearing requirements for OTC derivatives, which provides regulators and market participants with consolidated information on the clearing requirements of different jurisdictions. (10/28/2014) IOSCO press release.
FSB consults on information sharing. The Financial Stability Board published for comment draft guidance on cooperation and information sharing with host authorities of jurisdictions not represented on crisis management groups (CMGs) where a global systemically important financial institution (G-SIFI) has a systemic presence (non-CMG host authorities). The draft guidance sets out the process for identifying non-CMG host jurisdictions; criteria for assessing the systemic nature of a G-SIFI’s presence in a non-CMG host jurisdiction; cooperation and information sharing arrangements with a non-CMG host jurisdiction; and classes of information to be shared between home authorities and non-CMG host jurisdictions. Comments should be submitted by December 1, 2014. (10/17/2014) FSB press release.
FSB updates resolution guidance. The Financial Stability Board published updated “Key Attributes of Effective Resolution Regimes for Financial Institutions.” The update expands on the Key Attributes published in 2011, elaborating on specific key attributes concerning information sharing for resolution purposes and sector-specific guidance for insurers, financial market infrastructures and the protection of client assets in resolution. (10/15/2015) FSB press release.
Recovery of financial market infrastructures. The Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions published a report entitled “Recovery of financial market infrastructures.” The report provides guidance to financial market infrastructures such as central counterparties on how to develop plans to enable them to recover from threats to their viability and financial strength. It also provides guidance to relevant authorities in carrying out their responsibilities associated with the development and implementation of recovery plans. (10/15/2014) IOSCO press release.