FSB, Progress of Financial Regulatory Reforms
Hello our readers.
As you all may know, FSC maintains its close relationship with Financial Stability Board (FSB). The latest event was FSB meeting Zurich last month, which was attended by FSC’s Deputy Chairman for International Affairs.
After the meeting in January, FSB’s Chairman sent a letter to G20 Ministers and Central Bank Governors this month. The letter is about ‘Progress of Financial Regulatory Reforms.’ As a member of G20, Korea also received this letter. Why was the letter written and what it says?
FSB acknowledges that the overall financial market conditions have improved over recent months. However, there still remain issues to be carefully dealt with. Those are; medium-term downside risks, weak growth prospects and high levels of public and private sector debt in many economies.
Constrained by those abovementioned impediments, real investment has not yet been recovered to its fullest extent. What are the regulatory factors affecting the availability of long-term finance? Here, the regulatory factors include Basel III, OTC Derivatives market reforms, and changes affecting the regulatory and accounting framework for institutional investors.
There are actually many short-term adjustment effects. Nonetheless, FSB points out the most important contribution of the financial reform program to long-term investment. That is, to rebuild confidence and resilience in the global financial system. Ultimately, the reforms should contribute to enhancing the financial system’s capacity to intermediate investment flows through the cycle at all investment horizons.
Financial reforms by the G20 members are to support long-term investment and economic growth. For this ends, what are the priorities and work plans to be sought? To be addressed in the next blog post!