• Register
Return to: Home > News > Regulation > Taskforce pushes for global regulatory convergence

Taskforce pushes for global regulatory convergence

A cross-industry taskforce, co-ordinated by the International Federation of Accountants (IFAC), has called on the G20 to push for further convergence of regulation and standards across the world.

In a report, Regulatory Convergence in Financial Professions and Industries, the Private Sector Taskforce (PSTF) made several recommendations with the aim of facilitating economic stability in the world’s capital markets.

The taskforce said the major motivating factor for enhanced regulatory co-ordination, co-operation and convergence is “to minimise the effects of systemic risk that result from inconsistent and inadequate regulatory arrangements for globally important and increasingly interconnected industries, such as the financial sector”.

The report stresses the necessity of open communication and transparent processes, as well as continued co-operation between national and regional regulators and professional and industry groups to further develop global standards.

It warns against the dangers of unilateral decision making and advocates enhanced consultation and global co-operation on matters of regulatory reform to avoid regulatory fragmentation.

IFAC president Göran Tidström said while great strides have been made in regulatory convergence there is still more to be done and the global financial crisis highlighted this.

“IFAC supports the G20’s work to reform the international financial system and reduce informational uncertainty and risk and thus avoid future financial crises. The PSTF report encourages the G20 to maintain its current momentum towards international convergence identifies existing gaps and offers insightful recommendations. There will be no better time to progress these issues,” Tidström said.

The International Valuation Standards Council (IVSC) board of trustees chairman Michel Prada said the council supports the PSTF’s recommendations as there is an urgent need to find a more efficient approach to the valuation of all types of assets.

“The IVSC is actively engaged…in delivering a comprehensive set of international standards in order to restore confidence in the good functioning of financial markets,” Prada said.

“We are also convinced of the need for a stronger architecture of international financial regulation and enhanced cooperation between regulators and private sector organisations.”

Recommendation highlights:

  • Momentum - focus on regulatory convergence in the financial sector ensuring narrow gaps in regulatory convergence are identified. Discourage nations from making unilateral decisions and implementing unilateral national regulatory reforms that are inconsistent with international standards;
  • Consultation - enhance the breadth and depth of consultation on matters of regulatory reform, especially with groups most impacted by the reforms;
  • Standards and consistency - encourage and support the development, adoption, implementation and consistent interpretation of international standards for each of financial reporting, auditing, valuation and actuarial services;
  • Macroprudential oversight - enhance macroprudential oversight, which is supervision of the entire financial system, measures by enhancing the mandate of the Financial Stability Board and encouraging IOSCO towards convergence of capital markets regulation and oversight;
  • Strengthening regulatory organisations - support strengthening the resourcing and governance arrangements of international regulatory organisations including standard setters to enable them to achieve their objectives; and,
  • Resolution for bank-related financial institutions - establish a globally coordinated resolution regime for bank related financial institutions.

Other taskforce members included the CFA Institute, INSOL International, the Institute of International Finance, the International Accounting Standards Board, the International Actuarial Association, the International Corporate Governance Network, the International Insurance Society and the IVSC.

 

Top Content

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    FASB: a quest for simpler standards

    FASB chair Russell Golden addressed the IMA 2019 Annual Conference and Expo at the Sheraton San Diego Hotel and Marina, California, on 18 June. IMA immediate former chair-emeritus Alex Eng acted as moderator. Joe Pickard reports.

    read more

    The future of audit, and how to get there

    Two recent reports peer into the future of the audit profession. One analyses what an audit should offer, while the other looks at how the audit process will be carried out. Robin Amlôt takes a closer look at both.

    read more

    EFAA elects new president, focuses on digital future

    EFAA’s new president, Salvador Marin, outlined his key priorities for the next two years at the organisation’s 2019 annual general meeting, while outgoing president Bodo Richardt offered advice. Robin Amlôt reports.

    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.