Financial stability board stresses reform implementation

Notes financial system has continued to function well

KARACHI: Judging the country’s progress in terms of fiscal steadiness, the Financial Stability Board (FSB) met in London last week with chairperson Bank of England Governor Mark Carney in attendance to discuss current vulnerabilities, ongoing policy work and its work plan for 2017.

State Bank of Pakistan’s Governor Ashraf Mehmood Wathra represented FSB-Regional Consultative Group (RCG) of Asia as one of the Co-Chairs. Formed in 2011, the RCG Asia includes central banks and financial authorities of 16 jurisdictions. SBP Governor, along with Chief Executive Norman Chan of Hong Kong Monetary Authority) has been the co-chair of the FSB-RCG for Asia effective from July 1, 2015.

The meeting noted that the financial system has continued to function well, despite bouts of uncertainty and risk aversion. Further, the global financial system is more resilient as a result of the regulatory reforms introduced following the 2008 financial crisis.

The FSB emphasised on the importance of completing the implementation of the agreed reform programme, including Basel III.

The FSB, in consultation with the Basel Committee on Banking Supervision (BCBS), the International Association of Insurance Supervisors (IAIS) and national authorities, approved the 2016 lists of identified global systemically important banks (G-SIBs) and insurers (G-SIIs), which was released on Monday, November 21, 2016.

The plenary discussed the implementation to date of the total loss-absorbing capacity (TLAC) standard for banks, and reviewed progress of the work plan enhancing resilience, recovery planning and resolvability of central counterparties (CCPs). The FSB will publish the final recommendations by end-2016.

Published in The Express Tribune, November 23^rd, 2016.

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