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.

SocGen scandal prompts EU bank watchdog crackdown

LONDON, Dec 21 (Reuters) – European Union bank supervisors unveiled draft guidelines on Monday to apply lessons from a trading scandal that forced Societe Generale to book billions of euros in losses.

The Committee of European Banking Supervisors (CEBS), made up of national banking regulators from the 27 EU states, said it would consult on its guidelines that are due to take effect by the end of 2010.

They flesh out how high level risk management and remuneration principles should be applied to control risks in trading activities to make fraud harder to hide.

Britain’s financial reform faces carve-up threat

Britain's Prime Minister Gordon Brown (L) and Leader of the opposition Conservative Party David Cameron walk through the Members' Lobby of the Houses of Parliament before the State Opening of Parliament, in central London November 18, 2009.      REUTERS/Dominic Lipinski/Pool    LONDON, Nov 18 (Reuters) – Britain’s opposition Conservative Party said it would ditch the core of a financial sector reform bill if it wins power next year, but lawyers expect other parts such as curbs on bankers’ pay would be introduced.
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Banker pay curbs, clawbacks sought at G20 summit

France's President Nicolas Sarkozy and his wife Carla Bruni-Sarkozy arrive at the Phipps Conservatory for an opening reception and working dinner for heads of delegation at the Pittsburgh G20 Summit in Pittsburgh, Pennsylvania, September 24, 2009.     REUTERS/Philippe Wojazer (UNITED STATES POLITICS BUSINESS) By Kevin Drawbaugh and David Ljunggren
PITTSBURGH, Sept 24 (Reuters) – World leaders at the G20 meeting on Thursday closed in on a statement calling for new restraints on banker pay, an issue that became inflammatory during the global financial crisis, but would not endorse specific monetary caps — a deal-breaker for the United States. (more…)

UK says “living wills” to drive bank restructurings

British Financial Services Minister Paul Myners (file) By Huw Jones
LONDON, Sept 18 (Reuters) – Mandatory “living wills” for banks in Britain will spark major restructuring in the sector in the next few years, a UK minister said on Friday.

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Bankers defend bonuses as watchdogs close in

Morgan Stanley Co-President Walid Chammah adjusts his earphone during a news conference in Toyko, March 26, 2009. REUTERS/Issei Kato By Edward Taylor
FRANKFURT, Sept 8 (Reuters) – Top bankers defended their culture of bonuses on Tuesday against an onslaught of regulation that aims to put them on a tighter leash almost a year after Lehman Brothers collapsed.   Executives from Credit Suisse Group AG, Morgan Stanley and Deutsche Bank AG said the global financial system needed reform but defended a bonus-driven system that critics say encouraged banks to take big risks.
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G20 aims at bank pay and capital; stimulus to stay

By Sumeet Desai and Louise Egan

LONDON (Reuters) – G20 finance leaders on Saturday took aim at excessive bank pay and risk-taking at the root of the financial crisis and insisted trillions of dollars of emergency economic supports would be needed for some time.

Although the global economy looks brighter than when the Group of 20 finance ministers and central bankers met in April, their closing statement said they would not remove economic stimulus until the recovery was well entrenched.

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INTERVIEW – France sees G20 shifting its way on financial regulation

France's Economy Minister Christine Lagarde is seen during an interview with Reuters at the Economy Ministry in Paris September 1, 2009.  REUTERS/Charles Platiau By Anna Willard
PARIS, Sept 1 (Reuters) – France is optimistic about upcoming G20 meetings because many leaders, including British Prime Minister Gordon Brown, have moved closer to the French position, Economy Minister Christine Lagarde said.

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