• Register
Return to: Home > News > Regulation > Carney outlines FSB role in assessing G20 financial reforms

Carney outlines FSB role in assessing G20 financial reforms

The Financial Stability Board’s (FSB’s) chair Mark Carney has sent a letter to G20 finance ministers and the Central Bank governors to warn them against the risk of a loss of momentum in completing and fully implementing essential international standards.

In his letter, Carney highlighted that the G20 had achieved some success in implementing important reform post financial crisis. “A series of measures are eliminating toxic forms of shadow banking, and more generally transforming shadow banking into resilient market-based finance,” he wrote. “Durable market infrastructure is simplifying the previously complex – and dangerous – web of exposures in derivative markets. And authorities are now both more vigilant to emerging vulnerabilities and more consistent in preventing regulatory arbitrage.”

However he warned that there were nascent risks that if left unchecked could fragment financial markets and ultimately undermine the G20’s objective for strong sustainable and balanced growth.

To counter this risk, Carney argued that the G20 finance ministers and governors should consider reinforcing international regulatory cooperation and suggested that the FSB played a role focusing on the implementation and effects of the reforms.

“In this spirit, the FSB is increasingly assessing the effectiveness of the G20 financial reforms, their interactions and combined effects. This includes any unintended consequences for emerging market and developing economies. To embed this approach, the FSB is now developing a structured framework for these evaluations,” Carney wrote suggesting that the framework will be delivered to the G20 summit in Hamburg in July.

Carney’s letter then proceeded to lay out the FSB’s priorities under the German G20 presidency which started in December last year and will run until November of this year. According to Carney’s letter, the FSB has four main priorities in the month ahead:

  • Transforming shadow banking into resilient market-based finance, including by addressing structural vulnerabilities in asset management;
  • Making derivatives markets safer by progressing the post-crisis reforms to over-the-counter derivatives markets and delivering coordinated guidance on central counterparty resilience, recovery and resolution;
  • Supporting full and consistent implementation of post-crisis reforms, including the development of a structured framework for post-implementation evaluation of the effects of reforms; and
  • Addressing new and emerging vulnerabilities, including misconduct risks, as well as those stemming from the decline in correspondent banking and from climate-related financial risks.

Carney’s letter was sent to the G20 finance ministers and Central Bank governors ahead of their meeting in Baden-Baden on 17 and 18 March, and the full text is accessible online on the FSB website

Top Content

    Choosing the right location can have cast-iron benefits

    As Game of Thrones, one of the biggest television shows of all time, comes to an end, Joe Pickard looks at how tax incentives offered to television and film production companies help the wider economy.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.