FSB chair Draghi sets out timetable of reform proposals

26 April 2010

The next two years will be critical for the most important pieces of global regulatory reform and will largely determine whether the objectives and timelines of reform for strengthening financial stability will be met, FSB Chairman Mario Draghi Chairman said.

The key priority is the revamp of the Basel capital framework and the liquidity standard, he said and called for transition and grandfathering arrangements to avoid adverse macroeconomic impacts. Arrangement should be finalized in November.

 

On TBTF the two essential complements are the national resolution frameworks and improvements to financial infrastructure that reduce contagion risks, notably in the OTC derivatives market. The FSB will present a shortlist of likely policy options to the G20 Summit in June and a final package of recommendations to the November Summit.

 

The FSB established a working group to report by October policy options to increase the standardization of OTC derivatives and to develop a clear process to implement consistently mandatory clearing and exchange or electronic trading requirements at the global level.

 

The FSB will also consider how possible capital or liquidity surcharges on the one hand, and financial levies or taxes on the other might interact. It also considers further actions to revitalise the securitisation market.

 

The FSB will undertake a more detailed follow-up review on compensation practices in the second quarter of 2011, and calls for further progress in the international application of IFRS.

 

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