The four reports submitted to the G20 Finance Ministers updates among others on the progress made on strengthening the financial stability and discusses possible exit strategies from support measures.
Progress in implementing the G20 recommendations for strengthening financial stability
This updates the progress report made to the Pittsburgh Summit in September, and includes a description of the actions to date to implement the policy measures for improving financial regulation set out by the FSB in Pittsburgh. The areas on which it provides updates include:
Ø Building high quality capital and mitigating pro-cyclicality;
Ø Strengthening accounting standards;
Ø Reforming compensation practices to support financial stability;
Ø Improving over-the-counter derivatives markets;
Ø Addressing cross-border resolutions and systemically important financial institutions;
Ø Strengthening adherence to international supervisory and regulatory standards.
Full report
Exit from extraordinary financial sector support measures
This note reviews policies to withdraw from exceptional financial support measures. Exit policies in this area should be pre-announced, flexible, transparent and credible.
Although decisions on the timing of withdrawal of measures will depend on judgements on the strength of national financial systems, there are gains from advanced information exchange between countries and from stronger forms of co-ordination where cross-border spillover effects are potentially significant.
As many of the institutions regain access to private debt and equity markets, authorities are likely to focus increasingly on firm-specific interventions. There is also likely to be an increased expectation in financial markets for firms themselves to develop their own exit strategies and to reduce their use of emergency government support.
A number of facilities or guarantees made available have not been used, while others have expired without notable market impact or the need for successor programs. However, there are also support measures that were introduced during the crisis that have been made permanent, or that are still considered temporary but remain in place.
The note provides an overview of the different measures and includes a report by the staffs of the International Association of Deposit Insurers and the IMF on strategies to unwind temporary deposit insurance arrangements.
Full report
Guidance to Assess the Systemic Importance of Financial Institutions, Markets and Instruments: Initial Considerations
This report responds to a request made by the G20 Leaders in April 2009 to develop guidance on this subject for use by national authorities.
It outlines conceptual and analytical approaches to the assessment of systemic importance and discusses a possible form for general guidelines that would be sufficiently flexible to apply to a broad range of countries and circumstances.
One critical issue is the ongoing work to reduce the moral hazard posed by systemically important institutions. A second area is the work to address information gaps that were exposed by the recent crisis, where assessments of systemic importance can help to inform data collection needs. A third area is in helping to identify sources of financial sector risk that could have serious macroeconomic consequences.
Guidance to Assess the Systemic Importance
Guidance to Assess the Systemic Importance – Background paper
The Financial Crisis and Information Gaps
This report by the staff of the IMF and the secretariat of the FSB identifies information gaps and sets forth proposals for strengthening data collection to better capture the build-up of risk in the financial sector, improve data on international financial network connections, monitor the vulnerability of domestic economies to shocks, and improve the communication of official statistics.
The Financial Crisis and Information Gaps
Press release
FSB Progress report
Exit from extraordinary financial sector support measures
Guidance to Assess the Systemic Importance
Guidance to Assess the Systemic Importance – Background paper
The Financial Crisis and Information Gaps
© Financial Stability Board
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