On 31 March 2014, the Financial Stability Board ("FSB") published a note of its meeting that day. The note sets out the following next steps for policy work relating to financial regulatory reform:

  • Ending too-big-to-fail: the FSB intends, by the Brisbane Summit (15-16 November 2014), to develop (i) proposals on the adequacy, composition and location of gone-concern loss-absorbing capacity for global systemically important banks ("G-SIBs"); (ii) a framework for cross-border recognition of resolution actions including contractual and statutory elements (it was agreed that the industry should develop a proposal for a contractual approach before September 2014); (iii) a basic capital requirement for global systemically important insurers (work to be done by the International Association of Insurance Supervisors); and (iv) a report on the cross-border impacts of structural banking reforms being implemented and proposed in various jurisdictions. The note also states that FSB will publish, in April, finalized guidance on supervisory interaction with financial institutions on risk culture and a progress report on work needed to strengthen supervisory effectiveness. Both reports were published on 7 April 2014.
  • Shadow banking: the FSB will start information sharing among authorities in May and launch a peer review in 2015 on national implementation of the FSB's framework. The implementation timetable for the recommendations to address financial stability risks linked to securities financing transactions will be published in April and the framework for haircuts on non-centrally cleared securities financing transactions will be finalized by September.
  • Data gaps: the FSB intends to expand the data collection exercise for G-SIBs to include liabilities and funding. The exercise currently only includes concentration risk and connections between G-SIBs.
  • Reducing reliance on the ratings of credit rating agencies: a peer review report will be published in April together with action plans from individual member jurisdictions.

The FSB also discussed recent developments on the implementation and harmonization of OTC derivatives reforms and on the analysis and work related to benchmarks.

The FSB note is available at: http://www.financialstabilityboard.org/press/pr_140331.htm .

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