PwC's Managing upstream risk: Regulatory reform review - An asian perspective November 2013 | Page 4

1. Editorial

On 8 November 2013, the FSB met at a plenary
meeting in Moscow to discuss vulnerabilities
affecting the global financial system and reviewed
work plans for completing core financial reforms.
Some discussion points brought up during the
meeting are as follows:
• Building resilient financial institutions –
Members discussed the BCBS’s schedule for
completing the remaining pieces of policy work
on Basel III;
• Ending too-big-to-fail – Key near-term
deliverables in the ongoing work to address SIFIs;
• Shadow banking – The FSB reviewed and
approved the 2013 Global Shadow Banking
Monitoring Report, which will be published on
14 November;
• Making derivatives markets safer – Members
received an update on the remaining areas where
international policies are still being developed;
• Accounting and auditing – Discussed the
International Valuation Standards Council’s
proposals to develop valuation standards for
financial instruments that could help to augment
the valuation rules within accounting standards;
• Regional consultative groups – Reports from the
co-chairs of the FSB’s six regional consultative
groups; and

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Regulatory Reform Review | Editorial

• FSB Governance – work plan for the FSB’s review
of the structure of its representation, to be
completed by the Brisbane Summit.
With 2013 nearing an end and FSB’s efforts to track
regulatory reforms, concerns have not dwindled
on the somewhat fragmented and nationally (or
regionally) driven “global” reform agenda. There
seem also to be some disjointed approach to tackling
the financial services sector reform and the economic
or inclusive economic growth at this stage. The
two which should really straddle along in tandem
are separately driven - leading to arguments the
success of one is not holistically possible without
the other. There are further concerns on the lack of
liquidity which again will be counterproductive to the
regulatory reform initiatives if banks simply cannot
lend or meet with their liquidity requirements. On
this point Mark Carney, Governor of the Bank of
England, is quite prepare to allow British banks
to reduce their liquidity buffer if they meet their
minimum capital requirements. This is to encourage
banks to spur up lending.
Coming back to the global reform agenda a snapshot
of some issues (to name only a few) that still linger
on are as follows:
• Concerns over the LCR which could potentially
make banks prone to central banks funding;
• Lack of coordination and convergence in the OTC
derivatives rules, reporting requirements and
CCPs;