Financial Regulatory Forum

Is the Financial Stability Board the regulator to rule them all?

By Susannah Hammond, Thomson Reuters’  regulatory intelligence team. The views expressed are her own

LONDON, May 9 (Thomson Reuters Accelus) – The Financial Stability Board, regulatory policy maker of choice for the G20, has started to show its teeth. From its roots as the supranational setter of standards, guidance, policies and principles in the wake of the financial crisis, the FSB has started to clarify how it will monitor compliance with its requirements as well as deal forcefully with breaches.

A progress report on one of its strands of work regarding promoting global adherence to regulatory and supervisory standards on international cooperation and information exchange highlights how the FSB uses the International Monetary Fund as its objective reviewer of compliance with international standards. Critically, it shows how the FSB has taken the first steps in setting out the implications for what are called non-cooperative jurisdictions.

The FSB has noted that a small number of jurisdictions prioritised for evaluation have not, as at the end of April 2011, cooperated satisfactorily with the its process for promoting adherence to regulatory and supervisory standards on international cooperation and information exchange. It would appear that in those jurisdictions the authorities have, for whatever reason, chosen not to speak to the FSB.

The FSB says it will continue to pursue dialogue and has tried a variety of channels in an attempt to get the jurisdictions concerned to engage with the process. The FSB goes on to state that: “other measures may be implemented to apply additional pressure”. However, it does not say what those measures might be or how the pressure will be applied. The FSB will publish a list of non-cooperative jurisdictions if positive measures are not seen to be making sufficient progress. The use of such name-and-shame lists is deemed to have been effective at incentivising improvements in other areas such as tax standards.

ANALYSIS-Transaction taxes, liquidity and patience

By Mike Dolan

LONDON, Sept 8 (Reuters) – The case for a tax on global financial transactions may have been perversely boosted by the relative success of foreign exchange markets through the past three years of world banking turmoil.

As markets in credit, interbank and securities lending malfunctioned and stock markets lurched violently, currency markets, for the most part, appeared to have a “good crisis”.

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SCENARIOS – G20 efforts to agree on a bank levy

By Huw Jones

LONDON, March 31 (Reuters) – France backed Germany’s plans for a bank levy on Wednesday to boost momentum for a global deal among the G20 group of leading countries later this year.

But national differences are emerging over details and some countries oppose the principle of a levy or tax.

NEXT STOP WASHINGTON

The IMF was asked last November to put forward proposals for making banks contribute towards bailouts and will present its recommendations to G20 finance ministers in Washington on April 24-25

EU to discuss credit default swap speculation, watchdog frets

By Huw Jones and Krista Hughes

LONDON/BASEL, Switzerland, March 8 (Reuters) – European Union finance ministers will discuss next week how to dampen speculation on sovereign credit default swap markets, sources said, as central bankers worry some selling practices pose wider risks.

Greek debt has come under pressure as the country seeks to tackle a ballooning deficit and some politicians say speculators using CDSs, intended to insure against any risk of debt defaults, are amplifying the country’s problems.

“The European Commission may bring forward an initiative at the 16 March Ecofin,” an EU diplomat said.

Canada to oppose global bank tax – newspaper

TORONTO, Feb 19 (Reuters) – Canada will formally oppose international efforts by the world’s major economies to impose a global bank tax as the current government favors lower taxes, Canada’s National Post newspaper reported on Friday.

The report, citing unnamed government sources, said Canada’s move could potentially cause a major split among Group of 20 leaders at a summit in Toronto in June and thwart efforts to impose uniform financial regulations after the recession.

A spokesman for Canada’s finance ministry declined to confirm details of the report.

Merkel says G20 needs to act on big banks’ influence

BERLIN, Jan 20 (Reuters) – The Group of 20 economic powers needs to develop a set of rules to prevent banks becoming so big that they can hold governments to ransom, German Chancellor Angela Merkel said on Wednesday.

“This year is about implementing the regulations that have been agreed during the G20 process,” Merkel told parliament during a budget debate.

“It is also about finding further regulations, and that applies especially for the G20 meetings … to find ways to prevent banks becoming so big or so complex that they can hold us to ransom again,” she added.

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