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G20 update for 2013: from Russia, with love?

The G20 has released its latest progress report following a 15-16 February summit in Moscow – the first meeting under the Russian presidency of the G20. This meeting largely focused on the direction regulation would take in the near future, progress assessment and the effects of reform on the health of long-term investment finance.

Overall, reforms were assessed against the long-standing background objective of “promoting a safer, sounder and … more resilient financial system”. Some of the conclusions made by the G20 did not exactly come as a surprise. The most obvious? The industry is still in the “early days” of reform, and we still find ourselves in the “policy development phase or at an early stage of implementation”. While this makes the road ahead seem long and winding, the FSB has attempted to offer comfort by defending long implementation periods as an opportunity to “adjust” policy if required.

It looks as if the industry may get many opportunities to do just that. So, where is the policy development agenda headed in 2013? Let’s take a look.

Accounting standards

• Complete identification of clashes and divergences between IASB and FASB standards in 2013.
• Roadmap prepared by IASB and FASB for a common approach by end 2013 (good luck!).

Post-trade reforms

• Cross-border gap analysis by April 2013, to clamp down on “regulatory uncertainty”, which is the “most significant impediment” to getting OTC reforms right.
  
• Guidance developed by standard setters on regulatory access to trade repository data and advice on how data can be aggregated. Guidance to be “issued shortly” and finalised by next G20 summit.
• FSB Secretariat will serve as ROC LEI Secretariat for initial period.

Shadow banking

• “Refining” securities lending/repo regulation and general policy measures (excluding MMFs), with revised recommendations by next G20 summit.

Buffers/capital

• Basel III implementation assessment of all jurisdictions with recognised G-SIFIs by end 2013.
• Examination of improving bank public disclosures in line with Enhanced Disclosure Task Force (EDTF), narrowing down VaR modelling choices and harmonising model practices.

Recovery and resolution

• Assessment methodology to assist with national implementation and peer reviews, tested in pilot schemes by the IMF and World Bank, published Q2 2013.
• RRPs for all FSB listed SIFIs to be in place by June 2013.
• Assessments of SIFI progress/resolvability in Q3-Q4 2014.

Systemic firms (SIFIs)

• Systemic insurers methodology by Q2 2013.
• Methodology to identify non-bank SIFIs issued for consultation in Q2 2013. Stay with RegTechFS for the latest coverage of the national and global policy responses to the G20‘s agenda.

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Recommended Further Reading:

http://www.financialstabilityboard.org/publications/r_130216.pdf