The report is satisfied with the progress reached on new global standards to strengthen bank capital and liquidity, and limit leverage. FSB chair Draghi also called for an effective resolution regime for the too-big-to-fail problem.
The report was content with the progress on new global standards to strengthen bank capital and liquidity, and limit leverage. “The quality and amount of capital in the banking system must be significantly higher”. FSB chair Draghi also called for an effective resolution regime for the too big to fail problem.
Draghi also said that authorities “should provide transition arrangements that enable movement to robust new standards without putting the recovery at risk, rather than allow concerns over the transition to weaken the standards”.
The FSB hopes that the Basel Committee will deliver new standards before the Seoul Summit in November 2010, and recommends their implementation to start in 2012. These standards will complement agreed new trading book rules to be implemented by end of next year.
On the too big to fail issue, Draghi underlined that any effective approach to addressing the “too big to fail” problem needs to have an effective resolution regime at its base, including for cross-border firms, and urging G20 member states to agree on common rules.
Press release
Cover letter
Interim Report
Overview of Progress
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