FSB Chair's letter to G20 ministers and governors on financial reforms

11 April 2014

Mark Carney highlighted three areas where the support of G20 ministers and governors will be essential in the coming months: ending too-big-to-fail; transforming shadow banking to resilient market-based financing; and making derivatives markets safer.

In his letter to G20 ministers and governors, Carney updates, among others, on FSB’s activities in strengthening oversight and regulation of shadow banking according to the roadmap agreed by Leaders at St Petersburg.

The FSB has:

• agreed an information-sharing process to support implementation of the policy framework for oversight and regulation of shadow banking entities other than money market funds;
• developed further the policy framework to address financial stability risks associated with securities financing transactions. This follows a review of the results of the public consultation and a further comprehensive quantitative impact study;
• an implementation timetable for the policy recommendations in this area has been agreed and will be published.

The BCBS has finalised its supervisory framework for large exposures, to be published shortly, and risk-sensitive capital requirements for banks' investments in equity of funds, to mitigate spill-over effects between banks and shadow banking entities.

Ahead of the Brisbane Summit, the FSB will start information sharing among authorities in May and will report initial finding. The framework for haircuts and haircut floors in repo and securities financing transactions will be finalised by then. After the Brisbane Summit, the FSB will launch a peer review on national implementation of the high-level policy framework in 2015.

Press release

Full letter

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