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Important steps towards completion of post-crisis regulatory reform
The Basel Committee's oversight body, the Group of Governors and Heads of Supervision (GHOS), endorsed a number of important steps in the completion of the post-crisis reform agenda.

The GHOS endorsed proposals from the Basel Committee on a common definition of the leverage ratio, which has been formulated to overcome differences in national accounting frameworks that have previously prevented ready comparison of bank leverage ratios across borders.
A globally consistent measure of bank leverage and consistent disclosure standards are central components of the Basel III regulatory framework for internationally active banks.
The leverage ratio is intended as a simple non-risk-based "backstop" measure that will reinforce the risk-based capital requirements.

The Committee will continue to monitor the implementation of the leverage ratio.
The final calibration, and any further adjustments to the definition, will be completed by 2017, with a view to migrating to a Pillar 1 (minimum capital requirement) treatment on 1 January 2018.

The GHOS also endorsed proposed changes to the Net Stable Funding Ratio, on which the Basel Committee will shortly commence consultation.
The NSFR is another important component of the Basel III framework; it complements the Liquidity Coverage Ratio and is designed to promote prudent funding structures by banks, with a particular focus on preventing over-reliance on short-term wholesale funding.
At its meeting in January 2013, the GHOS noted that finalising the NSFR should be a priority for the Basel Committee during 2013 and 2014; the start of consultation on the proposed revisions to the NSFR is an important step towards finalising the framework in the year ahead.
The Committee intends to release its consultative document shortly.

At its January 2013 meeting, the GHOS also asked the Committee to undertake further work in three areas related to the LCR:
(i) disclosure requirements,
(ii) the use of market-based indicators of liquidity to supplement existing measures and
(iii) the interaction between the LCR and the provision of central bank facilities.

In relation to disclosure, the GHOS endorsed Basel Committee proposals regarding minimum requirements for liquidity-related disclosures.
The GHOS also endorsed the Committee's intention to publish further guidance on how national authorities can utilise market-based indicators of liquidity within their own frameworks for assessing whether assets qualify as High Quality Liquid Assets (HQLA) under the LCR.

The LCR is built on the principle that banks' first line of defence against liquidity shocks should be their own self-insurance, and that central banks should remain the lenders of last resort.
Nevertheless, it is also the case that central banks may be the most reliable source of liquidity available to banks in times of stress.
As a result, the Committee has reached the view, which the GHOS today endorsed, that Committed Liquidity Facilities of a type already recognised for jurisdictions with insufficient HQLA could have a role to play within the LCR.
The inclusion of these facilities, which may be provided at the discretion of monetary authorities, would however be subject to a number of constraints designed to avoid undermining the principles noted above.
The Committee will shortly release revisions to the LCR to give effect to this change.

Finally, the GHOS also reviewed and endorsed the Committee's strategic priorities for the next two years.
Apart from completing the crisis-related policy reform agenda as a matter of priority, the Committee will focus on three other broad themes: continuing to deepen its programme of monitoring and assessing the implementation of the agreed reforms; further examining the regulatory framework's balance between simplicity, comparability and risk sensitivity; and improving effectiveness of supervision.
All of these will involve significant work during 2014 and 2015.

Mario Draghi, Chairman of the GHOS and President of the European Central Bank, said:
"The finalisation of an internationally consistent measure of bank leverage is a significant step towards the full implementation of Basel III.
The leverage ratio is an important backstop to the risk-based capital regime and, when coupled with the LCR and NSFR, provides a regulatory framework that should help to ensure that banks are much more resilient to financial shocks than was the case in the past."

Stefan Ingves, Chairman of the Basel Committee and Governor of Sveriges Riksbank, noted that:
"Good progress is being made to conclude the ambitious reform agenda, and in ensuring its full and consistent implementation.
There is more to be done, but the Committee is on track to complete the crisis-related reforms soon and, in doing so, to establish a stronger and more resilient banking system."

The implementation of the Basel III Framework
The last days of 2012, the United States (US) regulatory authorities announced that they did not expect their rules implementing Basel 3 would become effective on 1 January 2013, although they are working as “expeditiously as possible” to complete their rulemaking process.

Similarly in the European Union (EU), the trilogue between the European Commission, the European Parliament and the Council of Ministers to agree the text of Capital Requirements Directive IV (CRD IV, the EU version of Basel 3) is still ongoing and there will not be sufficient time for CRD IV to be codified as legislation and put into effect on 1 January 2013.
The Basel 3 capital standards are designed to strengthen banks’ resilience by requiring more and better quality capital and by addressing and capturing risks not adequately recognised previously.

The aim is to ensure that banks can weather future financial storms without disruption to their lending.

This should in turn make them less likely to create or amplify problems in other areas of the economy and facilitate their contribution to long-term sustainable economic growth.
Basel 3 represents an appropriate balance in bolstering resilience whilst at the same time (with its extended phase-in) not unduly hampering lending to business and households today and ensuring banks can continue to lend in any downturn tomorrow.

As of end-May 2012, 21 of 27 Basel member countries have implemented Basel II, which had been due to come into force from end-2006.
In addition, Indonesia and Russia have implemented Basel II’s Pillar 1 (minimum capital requirements).
Argentina, China, Turkey and the United States are in the process of implementing Basel II.

With regard to Basel 2.5, which was due to be implemented from end 2011, 20 member countries have final rules that are in force.
Argentina, Indonesia, Mexico, Russia, Turkey and the United States have not issued final regulations.
Russia and the United States have issued draft regulations which partially cover Basel 2.5.
Saudi Arabia has issued final regulations but these have not yet come into force.
Among the 29 global systemically important banks (G-SIBs) identified in November 2011, nine are headquartered in jurisdictions that have not yet fully implemented Basel II and/or Basel 2.5.

Draft Basel III regulations have not yet been issued by seven Basel Committee member jurisdictions: Argentina, Hong Kong SAR, Indonesia, Korea, Russia, Turkey and the United States.
The majority of these jurisdictions believe they can issue final regulations in time to implement by the deadline of 1 January 2013.
However, for others, depending on their domestic rule-making process, meeting the deadline could be a significant challenge.

In addition to monitoring whether its members have issued regulations to implement the Basel III rules, the Basel Committee has established a process to review the content of the new rules.
This second level of review is meant to ensure that the national adaptations of Basel III are consistent with the minimum standards agreed to under Basel III.
The Basel Committee has initiated peer reviews of the domestic regulations of the European Union, Japan and the United States to assess their consistency with the globally agreed standards.
The findings of these reviews are preliminary since the formulation of national standards is still ongoing and the analysis is not yet completed.
Nevertheless, there is a possibility that national implementation will be weaker than the globally-agreed standards in some key areas.

The Basel Committee urges G20 Leaders to call on jurisdictions to meet their commitments made in Cannes to implement Basel III fully and consistently, and within the agreed timetable.

A third level of implementation review conducted by the Basel Committee examines whether there are unjustifiable inconsistencies in risk measurement approaches across banks and jurisdictions and the implications these might have for the calculation of regulatory capital.
This review of banks’ risk-weighting practices includes the use of test portfolio exercises, horizontal reviews of practices across banks and jurisdictions, and joint on-site visits to large, internationally-active banks.
The Basel Committee firmly believes that full, timely and consistent implementation of Basel III among its members is essential for restoring confidence in the regulatory framework for banks and to help ensure a safe and stable global banking system.
The Committee will provide an updated progress report to G20 Finance Ministers and central bank governors at their meeting in November 2012.  

The most important Basel III papers announced
The Basel Committee issued today the Basel III rules text, which presents the details of global regulatory standards on bank capital adequacy and liquidity agreed by the Governors and Heads of Supervision, and endorsed by the G20 Leaders at their November 2010 Seoul summit.
The rules text presents the details of the Basel III Framework, which covers both microprudential and macroprudential elements.
The Framework sets out higher and better-quality capital, better risk coverage, the introduction of a leverage ratio as a backstop to the risk-based requirement, measures to promote the build up of capital that can be drawn down in periods of stress, and the introduction of two global liquidity standards.


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The G20 leaders officially endorse the Basel III framework
The G20 Leaders at the Seoul Summit on 11-12 November endorsed the Basel III framework and the the Financial Stability Board’s (FSB) policy framework for reducing the moral hazard of systemically important financial institutions (SIFIs), including the work processes and timelines set out in the report submitted to the Summit.
SIFIs are financial institutions whose disorderly failure, because of their size, complexity and systemic interconnectedness, would cause significant disruption to the wider financial system and economic activity.
We read in the final G20 Communique:
"We endorsed the landmark agreement reached by the Basel Committee on the new bank capital and liquidity framework, which increases the resilience of the global banking system by raising the quality, quantity and international consistency of bank capital and liquidity, constrains the build-up of leverage and maturity mismatches, and introduces capital buffers above the minimum requirements that can be drawn upon in bad times.

The framework includes an internationally harmonized leverage ratio to serve as a backstop to the risk-based capital measures.

With this, we have achieved far-reaching reform of the global banking system.

The new standards will markedly reduce banks' incentive to take excessive risks, lower the likelihood and severity of future crises, and enable banks to withstand - without extraordinary government support - stresses of a magnitude associated with the recent financial crisis.

This will result in a banking system that can better support stable economic growth.

We are committed to adopt and implement fully these standards within the agreed timeframe that is consistent with economic recovery and financial stability.

The new framework will be translated into our national laws and regulations, and will be implemented starting on January 1, 2013 and fully phased in by January 1, 2019."

The Group of Governors and Heads of Supervision announces higher global minimum capital standards
At its 12 September 2010 meeting, the Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, announced a substantial strengthening of existing capital requirements and fully endorsed the agreements it reached on 26 July 2010.
These capital reforms, together with the introduction of a global liquidity standard, deliver on the core of the global financial reform agenda and will be presented to the Seoul G20 Leaders summit in November.

The Committee’s package of reforms will increase the minimum common equity requirement from 2% to 4.5%.
In addition, banks will be required to hold a capital conservation buffer of 2.5% to withstand future periods of stress bringing the total common equity requirements to 7%.
This reinforces the stronger definition of capital agreed by Governors and Heads of Supervision in July and the higher capital requirements for trading, derivative and securitisation activities to be introduced at the end of 2011.

Increased capital requirements

Under the agreements reached, the minimum requirement for common equity, the highest form of loss absorbing capital, will be raised from the current 2% level, before the application of regulatory adjustments, to 4.5% after the application of stricter adjustments.
This will be phased in by 1 January 2015.
The Tier 1 capital requirement, which includes common equity and other qualifying financial instruments based on stricter criteria, will increase from 4% to 6% over the same period.

The Group of Governors and Heads of Supervision also agreed that the capital conservation buffer above the regulatory minimum requirement be calibrated at 2.5% and be met with common equity, after the application of deductions.
The purpose of the conservation buffer is to ensure that banks maintain a buffer of capital that can be used to absorb losses during periods of financial and economic stress.
While banks are allowed to draw on the buffer during such periods of stress, the closer their regulatory capital ratios approach the minimum requirement, the greater the constraints on earnings distributions.
This framework will reinforce the objective of sound supervision and bank governance and address the collective action problem that has prevented some banks from curtailing distributions such as discretionary bonuses and high dividends, even in the face of deteriorating capital positions.

A countercyclical buffer within a range of 0% – 2.5% of common equity or other fully loss absorbing capital will be implemented according to national circumstances.
The purpose of the countercyclical buffer is to achieve the broader macroprudential goal of protecting the banking sector from periods of excess aggregate credit growth.
For any given country, this buffer will only be in effect when there is excess credit growth that is resulting in a system wide build up of risk.
The countercyclical buffer, when in effect, would be introduced as an extension of the conservation buffer range.

These capital requirements are supplemented by a non-risk-based leverage ratio that will serve as a backstop to the risk-based measures described above.
In July, Governors and Heads of Supervision agreed to test a minimum Tier 1 leverage ratio of 3% during the parallel run period.
Based on the results of the parallel run period, any final adjustments would be carried out in the first half of 2017 with a view to migrating to a Pillar 1 treatment on 1 January 2018 based on appropriate review and calibration.

Systemically important banks should have loss absorbing capacity beyond the standards announced today and work continues on this issue in the Financial Stability Board and relevant Basel Committee work streams.
The Basel Committee and the FSB are developing a well integrated approach to systemically important financial institutions which could include combinations of capital surcharges, contingent capital and bail-in debt.
In addition, work is continuing to strengthen resolution regimes.
The Basel Committee also recently issued a consultative document Proposal to ensure the loss absorbency of regulatory capital at the point of non-viability.
Governors and Heads of Supervision endorse the aim to strengthen the loss absorbency of non-common Tier 1 and Tier 2 capital instruments.

Transition arrangements

Since the onset of the crisis, banks have already undertaken substantial efforts to raise their capital levels.
However, preliminary results of the Committee’s comprehensive quantitative impact study show that as of the end of 2009, large banks will need, in the aggregate, a significant amount of additional capital to meet these new requirements.
Smaller banks, which are particularly important for lending to the SME sector, for the most part already meet these higher standards.
The Governors and Heads of Supervision also agreed on transitional arrangements for implementing the new standards.
These will help ensure that the banking sector can meet the higher capital standards through reasonable earnings retention and capital raising, while still supporting lending to the economy.
The transitional arrangements include:

1. National implementation by member countries will begin on 1 January 2013.
Member countries must translate the rules into national laws and regulations before this date.
As of 1 January 2013, banks will be required to meet the following new minimum requirements in relation to risk-weighted assets (RWAs):

– 3.5% common equity/RWAs;

– 4.5% Tier 1 capital/RWAs, and

– 8.0% total capital/RWAs.

The minimum common equity and Tier 1 requirements will be phased in between 1 January 2013 and 1 January 2015.
On 1 January 2013, the minimum common equity requirement will rise from the current 2% level to 3.5%.
The Tier 1 capital requirement will rise from 4% to 4.5%.
On 1 January 2014, banks will have to meet a 4% minimum common equity requirement and a Tier 1 requirement of 5.5%.
On 1 January 2015, banks will have to meet the 4.5% common equity and the 6% Tier 1 requirements.
The total capital requirement remains at the existing level of 8.0% and so does not need to be phased in.
The difference between the total capital requirement of 8.0% and the Tier 1 requirement can be met with Tier 2 and higher forms of capital.
2. The regulatory adjustments (ie deductions and prudential filters), including amounts above the aggregate 15% limit for investments in financial institutions, mortgage servicing rights, and deferred tax assets from timing differences, would be fully deducted from common equity by 1 January 2018.
3. In particular, the regulatory adjustments will begin at 20% of the required deductions from common equity on 1 January 2014, 40% on 1 January 2015, 60% on 1 January 2016, 80% on 1 January 2017, and reach 100% on 1 January 2018.
During this transition period, the remainder not deducted from common equity will continue to be subject to existing national treatments.
4. The capital conservation buffer will be phased in between 1 January 2016 and year end 2018 becoming fully effective on 1 January 2019.
It will begin at 0.625% of RWAs on 1 January 2016 and increase each subsequent year by an additional 0.625 percentage points, to reach its final level of 2.5% of RWAs on 1 January 2019.
Countries that experience excessive credit growth should consider accelerating the build up of the capital conservation buffer and the countercyclical buffer.
National authorities have the discretion to impose shorter transition periods and should do so where appropriate.
5. Banks that already meet the minimum ratio requirement during the transition period but remain below the 7% common equity target (minimum plus conservation buffer) should maintain prudent earnings retention policies with a view to meeting the conservation buffer as soon as reasonably possible.
6. Existing public sector capital injections will be grandfathered until 1 January 2018.
Capital instruments that no longer qualify as non-common equity Tier 1 capital or Tier 2 capital will be phased out over a 10 year horizon beginning 1 January 2013.
Fixing the base at the nominal amount of such instruments outstanding on 1 January 2013, their recognition will be capped at 90% from 1 January 2013, with the cap reducing by 10 percentage points in each subsequent year.
In addition, instruments with an incentive to be redeemed will be phased out at their effective maturity date.
7. Capital instruments that do not meet the criteria for inclusion in common equity Tier 1 will be excluded from common equity Tier 1 as of 1 January 2013.
However, instruments meeting the following three conditions will be phased out over the same horizon described in the previous bullet point:
(1) they are issued by a non-joint stock company;
(2) they are treated as equity under the prevailing accounting standards; and
(3) they receive unlimited recognition as part of Tier 1 capital under current national banking law.
8. Only those instruments issued before the date of this press release should qualify for the above transition arrangements.
Phase-in arrangements for the leverage ratio were announced in the 26 July 2010 press release of the Group of Governors and Heads of Supervision.
That is, the supervisory monitoring period will commence 1 January 2011; the parallel run period will commence 1 January 2013 and run until 1 January 2017; and disclosure of the leverage ratio and its components will start 1 January 2015.
Based on the results of the parallel run period, any final adjustments will be carried out in the first half of 2017 with a view to migrating to a Pillar 1 treatment on 1 January 2018 based on appropriate review and calibration.

After an observation period beginning in 2011, the liquidity coverage ratio (LCR) will be introduced on 1 January 2015. The revised net stable funding ratio (NSFR) will move to a minimum standard by 1 January 2018.
The Committee will put in place rigorous reporting processes to monitor the ratios during the transition period and will continue to review the implications of these standards for financial markets, credit extension and economic growth, addressing unintended consequences as necessary.
The Basel Committee on Banking Supervision provides a forum for regular cooperation on banking supervisory matters. It seeks to promote and strengthen supervisory and risk management practices globally.
The Committee comprises representatives from Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong SAR, India, Indonesia, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.
The Group of Central Bank Governors and Heads of Supervision is the governing body of the Basel Committee and is comprised of central bank governors and (non-central bank) heads of supervision from member countries. The Committee’s Secretariat is based at the Bank for International Settlements in Basel, Switzerland.
Basel iii
Basel iii

G20 - Meeting of Finance Ministers and Central Bank Governors, Busan, Republic of Korea, June 5, 2010
"We, the G20 Finance Ministers and Central Bank Governors, met at a critical juncture to firmly secure the global recovery and address the economic challenges and risks.
Building on progress to date, we affirmed our commitment to intensify our efforts and to accelerate financial repair and reform.
Therefore, we:
Committed to reach agreement expeditiously on stronger capital and liquidity standards as the core of our reform agenda and in that regard fully support the work of the Basel Committee on Banking Supervision and call on them to propose internationally agreed rules to improve both the quantity and quality of bank capital and to discourage excessive leverage and risk taking by the November 2010 Seoul Summit.
It is critical that our banking regulators develop capital and liquidity rules of sufficient rigor to allow our financial firms to withstand future downturns in the global financial system.
As we agreed, these rules will be phased in as financial conditions improve and economic recovery is assured, with the aim of implementation by end-2012.
We welcome the progress on the quantitative and macroeconomic impact studies which will inform the calibration and phasing in, respectively.
We are committed to move together in a transparent and coordinated way on national implementation of the agreed rules. Implementation of these new rules should be complemented by strong supervision."

No, we do not have the Basel iii papers yet
December 2009: The Basel Committee on Banking Supervision published two consultative documents which have been widely dubbed "Basel III".
The consultative documents entitled “Strengthening the Resilience of the Banking Sector” (sometimes referred to as ‘Basel III') and “International Framework for Liquidity Risk Measurement, Standards and Monitoring” are a part of the Basel Committee’s ongoing work.
These papers are NOT the Basel III framework. 

G20 at the London Summit in April 2009

"We, the Leaders of the G20, have taken, and will continue to take, action to strengthen regulation and supervision in line with the commitments we made in Washington to reform the regulation of the financial sector."

"All G20 countries should progressively adopt the Basel II capital framework; and the BCBS and national authorities should develop and agree by 2010 a global framework for promoting stronger liquidity buffers at financial institutions, including cross-border institutions. "

G20 at the Pittsburgh Summit in September 2009


"We are committed to
take action at the national and international level to raise standards together so that our national authorities implement global standards consistently in a way that ensures a level playing field and avoids fragmentation of markets, protectionism, and regulatory arbitrage."

Progress is being made in the two major international initiatives now underway on bank resolution frameworks, namely the Cross-Border Bank Resolution Group (CBRG) of the Basel Committee on Banking Supervision (BCBS) and the initiative by the IMF and the World Bank on the legal, institutional and regulatory framework for national bank insolvency regimes.
In September, the CBRG published for consultation a report, which includes recommendations for authorities on effective crisis management and resolution processes for large cross-border institutions. "

" The Group of Central Bank Governors and Heads of Supervision, the oversight body of the BCBS, reached agreement in September to introduce a framework for countercyclical capital buffers above the minimum requirement.
The framework will include capital conservation measures such as constraints on capital distributions.
The Basel Committee will review an appropriate set of indicators, such as earnings and credit-based variables, as a way to condition the build up and release of capital buffers.

The BCBS is also actively engaged with accounting standard setters to promote more forward-looking provisions based on expected losses.

The IASB is working to enhance its provisioning standards and guidance on an accelerated basis, including by considering a proposed impairment standard based on an expected loss (called an “expected cash flow”) approach to loan loss provisioning for issuance in October 2009.
The IASB published initial proposals on its website in June to seek input regarding the feasibility of this expected loss approach before it issues an exposure draft in October 2009.

Finally, the BCBS continues to work on approaches to address any excessive cyclicality of minimum capital requirements.
The BCBS will issue concrete proposals on these measures by end-2009.
It will carry out an impact assessment at the beginning of 2010, with calibration of the new requirements to be completed by end-2010. Appropriate implementation standards will be developed to ensure a phase-in of these new measures that does not impede the recovery of the real economy. "

" We commit to developing by end-2010 internationally agreed rules to improve both the quantity and quality of bank capital and to discourage excessive leverage and these rules will be phased in as financial conditions improve and economic recovery is assured, with the aim of implementation by end-2012.
The national implementation of higher level and better quality capital requirements, counter-cyclical capital buffers, higher capital requirements for risky products and off balance sheet activities, and as elements of the Basel II capital framework, together with strengthened liquidity risk requirements and forward-looking provisioning, will reduce incentives for banks to take excessive risks and create a financial system better prepared to withstand adverse shocks.
We welcome the key measures recently agreed by the oversight body of Basel Committee on Banking Supervision to strengthen the supervision and regulation of the banking sector.

The BCBS should review minimum levels of capital and develop recommendations in 2010.

Our efforts to deal with impaired assets and to encourage the raising of additional capital must continue, where needed.
We commit to conduct robust, transparent stress tests as needed.

We call on banks to retain a greater proportion of current profits to build capital, where needed, to support lending. "

" The BCBS has stated that the level of capital in the banking system, both the minimum capital requirement and the buffers above it, will be raised relative to pre-crisis levels to improve resilience to future episodes of stress.
This will be done through a combination of measures such as strengthening the risk coverage of the Basel II capital framework, improving the quality of capital, and raising the overall minimum requirement.
The BCBS will carry out an impact assessment at the beginning of 2010 and calibrate the new requirements by end-2010. Appropriate implementation standards will be developed to ensure a phase-in that does not impede the recovery of the real economy. "  

Regulatory Arbitrage and Basel iii
Deutsche Bank is concerned about the regulatory arbitrage possibilities. Andrew Procter, the bank’s head of government and regulatory affairs, has expressed concern that the United States may not adopt Basel III.

“The United States continues to influence the Basel process but, in effect, treats the guidelines as optional” .
“Deutsche Bank believes that no other Basel committee members should move ahead with implementation until there is a clear timetable from the U.S.” Andrew believes

Our view is that Basel III will be implemented in the United States.
We are not sure. Perhaps, after the end of 2012. It is true that the United States delayed Basel II, and we consider that something similar is likely under Basel III. But, Basel III is going to be implemented in the United States. 

A report from Rabobank’s Economic Research Department argues that proposed capital and liquidity requirements for internationally operating banks will have a major impact on the banking sector, could restrict the credit supply and hamper economic growth.

Under the Basel III requirements, banks will have to hold more and higher quality liquid assets as a buffer for the short-term. They will also have to finance these assets with more stable and long-term funding. The Rabobank economists claim that the new requirements
will affect the traditional role of the banks, that is transforming customer’s savings into loans.

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In addition to the above discount, you will have a $100 discount for each of the following Basel 3 programs, when they will be available:

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The Basel ii Compliance Professionals Association (BCPA), the largest association of Basel ii professionals in the world, has a new kid: The Basel iii Compliance Professionals Association (BiiiCPA). Join us.
The members of the Basel ii Compliance Professionals Association (BCPA) will not automatically become members of the Basel iii Compliance Professionals Association (BiiiCPA). To become a member you must sign up, as we must comply with several international laws and regulations, including the new privacy related laws around the world.  Membership is free.
To sign up:

The Basel iii Accord is near
The Financial Stability Board has been established to address vulnerabilities and to develop and implement strong regulatory, supervisory and other policies in the interest of financial stability.
It comprises senior representatives of national financial authorities (central banks, regulatory and supervisory authorities and ministries of finance), international financial institutions, standard setting bodies, and committees of central bank experts.

The Financial Stability Board is supported by a secretariat based a
t the Bank for International Settlements in Basel, Switzerland.

Institutions represented on the Financial Stability Board include international
standard-setting bodies like the Basel Committee on Banking Supervision (BCBS), the Committee on the Global Financial System (CGFS), the Committee on Payment and Settlement Systems (CPSS), the International Association of Insurance Supervisors (IAIS), the International Accounting Standards Board (IASB) and the International Organization of Securities Commissions (IOSCO)

We move towards Basel iii
Some really important changes:
1. The predominant form of Tier 1 capital must be common shares and retained earnings.
2. The Basel Committee on Banking Supervision is working urgently to build stronger buffers into the financial system, covering capital, liquidity and provisioning, that will raise defenses and constrain the procyclical build-up of leverage in the system.

New rules will be set out by end-2009, calibrated in 2010 and phased in as financial conditions improve and economic recovery is assured.

3. The
level and quality of minimum capital requirements will increase substantially over time.

4. The Basel Committee will issue by the end of 2009 a new minimum global liquidity standard. This new regulatory framework introduces a liquidity coverage ratio that can be applied in a cross-border setting.

The Basel Committee will issue new standards by mid-2010 to take full account of counterparty credit risks, the benefits of centrally cleared contracts and collateralisation.

Improving Financial Regulation
Report of the Financial Stability Board to G20 Leaders
25 September 2009

1. Since the London Summit, the Financial Stability Board (FSB) and its members have advanced a major program of financial reforms based on clear principles and timetables for implementation that are designed to ensure that a crisis on this scale never happens again.

2. Much has already been achieved, and much is underway that when implemented will result in a very different financial system than the one that brought us this crisis.

policy development is not completed, and detailed implementation of the full set of needed reforms will take time and perseverance.

3. In a globally integrated market economy, where concerns about a level playing field and protectionist pressures are real, it is vital that G20 Leaders strongly support the international policy development underway and signal their determination to implement fully and consistently the reforms at national levels.

4. In recent months, expectations have taken hold in some parts of the private financial sector that the financial and regulatory system will remain little changed from its pre-crisis contours.

These expectations – that business will be able to go on just as before – need to be dispelled.

5. Our objective is to create a more disciplined and less procyclical financial system that better supports balanced sustainable economic growth.

This system will
not allow leverage to increase to the extent that it did.
Nor will we allow risks to be taken where profits accrue to individual actors but ultimate losses are borne by governments and the wider public.

6. To these ends,
our program includes substantially higher requirements for the quantity and quality of capital and liquidity at financial institutions.

It also includes
reforms to accounting standards and compensation regimes that improve transparency and limit incentives to excessive risk taking.

We will constrain risks in trading-related activity by improving market infrastructure and by significantly raising capital charges for trading books.

7. Our reform plans set reasonable implementation windows to avoid aggravating the present crisis.

While the financial system will continue to face challenges for some time, the faster our financial systems and economies recover, the faster we should implement finalised reforms.

8. This crisis has highlighted the moral hazard risks posed by institutions that have become too big to fail or that, by their interconnected nature, are too complex to resolve.

We need to address the
deeper-seated challenges that these institutions pose.

We are committed to developing the solutions to these problems over the next twelve months.

9. In recent quarters, many financial institutions have returned to profitability.

These profits owe much to the extraordinary official measures taken to stabilise the system, many of which remain in place.

It is imperative that these profits be retained in financial institutions to rebuild capital necessary to support lending, allow official support measures to be removed and prepare institutions to meet future higher capital requirements.

10. The international supervisory and regulatory community is agreed that restricting dividend payments, share buybacks and compensation rates are appropriate means to these ends.

11. The
support of G20 Leaders
will be vital for the major decisions that will need to be made in these important areas, and we ask that you support us in these endeavours.

Achievements to date

12. Bolstering the resilience of the international financial system is a broad project encompassing a considerable number of related measures.
Substantial progress has been made on the many measures recommended in the Financial Stability Forum (FSF)’s April 2008 and 2009 Reports, the G20 Washington Action Plan and the London Summit Statement, especially at the level of international policy development.

Significant actions have been taken since the London Summit:

• The shortcomings in the Basel capital framework that generated incentives for off-balance sheet securitisation activity have been removed;

• The weaknesses in accounting practices and national standards that generated similar incentives for off-balance sheet activities have been addressed.

New standards have been set out that enhance the consolidation of special purpose vehicles and the transparency of banks’ relationships with such entities;

• The risks that banks assume in their trading activities have been brought under better control.

Substantially higher capital requirements against risks in banks’ trading activities have been issued;

• Strong new risk management standards for financial institutions have been issued and are being implemented, covering bank governance, the management of liquidity risk, underwriting and concentration risks, stress testing, valuation practices and exposures to off-balance sheet activities;

• Banks’ disclosures of their on- and off-balance sheet risk exposures have been materially improved.

New disclosure standards for banks have been issued covering valuation and liquidity risk, securitisation and off-balance sheet activities;

• The FSB Principles for Sound Compensation Practices have been integrated into the Basel capital framework, a
nd international guidance is under development to reinforce their implementation;

• Central counterparties have been introduced to clear credit default swaps, reducing the systemic risks from this market.
Transparency and standardisation in this market have been increased and dealers have reduced their cross exposures through trade compression;

• Stronger oversight regimes for credit rating agencies have been developed.

New legislation creating oversight regimes has been approved in Japan and is close to final approval in the EU; in the US, amendments to the existing oversight regime have been proposed or already made;

• Internationally agreed principles for the oversight of hedge funds have been issued, and national and regional legislation has been or is in the process of being introduced to implement them;

• Good practices for due diligence by asset managers when investing in structured finance products have been issued, which will reduce their reliance on credit rating agencies;

• Abusive short selling has been addressed. Internationally agreed principles have been issued to counteract the abusive use of short selling while maintaining the benefits of short selling for the functioning of the markets, and their implementation will be monitored;

• Supervisory coordination and cooperation in the oversight of the most important global financial firms have improved. Supervisory colleges have now been established for all the large complex financial groups that the FSB has identified as needing colleges;

• Strengthened arrangements for system-wide oversight have been developed in many jurisdictions, bringing together the relevant authorities to better assess risks to financial stability and identify mitigating actions;

• Firm-by-firm contingency planning is underway to implement the FSB Principles for Cross-border Cooperation on Crisis Management.

Relevant authorities will hold contingency planning meetings for major cross-border banks within the first half of 2010 and assess the barriers to coordinated action that may arise in handling severe stress at these firms;

• Depositors will be protected in a more consistent way around the world.

Core Principles for Effective Deposit Insurance Systems have been developed and an assessment methodology is under preparation.

Critical work underway

13. Beyond the areas above, a large body of critical work is underway to take forward other parts of the London Summit Statement. In some areas, policy development is reaching a phase in which difficult decisions will need to be made.

Strengthening the global capital framework

14. The Basel Committee on Banking Supervision is working urgently to build stronger buffers into the financial system, covering capital, liquidity and provisioning, that will raise defenses and constrain the procyclical build-up of leverage in the system.

New rules will be set out by end-2009, calibrated in 2010 and phased in as financial conditions improve and economic recovery is assured.

Government capital injections will be grandfathered.

Banks should be retaining profits now to prepare to meet these future additional capital requirements.

Restricting dividends, share buybacks and compensation rates is a necessary part of that process.

16. The new rules will require a clear step up in the amount and quality of capital that the system as a whole will need to carry, so that banks holding the minimum required capital levels will be clearly viable in a crisis and confidence in the system as a whole will be maintained.

17. To these ends, the Basel II capital framework is being revised.
We are agreed that:

• the level and quality of minimum capital requirements will increase substantially over time;

capital requirements will operate countercyclically, so that financial institutions will be required to build capital buffers above the minimum requirements during good times that can be drawn down during more difficult periods;

• significantly higher capital requirements for risks in banks’ trading books will be implemented, with average capital requirements for the largest banks’ trading books at least doubling by end-2010;

• the quality, consistency and transparency of the Tier 1 capital base will be raised.

The predominant form of Tier 1 capital must be common shares and retained earnings.

Appropriate principles will be developed for non-joint stock companies to ensure they hold comparable levels of high quality Tier 1 capital.

Moreover, deductions and prudential filters will be harmonised internationally and generally applied at the level of common equity or its equivalent in the case of non-joint stock companies;

• the definition of capital will be harmonised across jurisdictions and all components of the capital base will be fully disclosed so as to allow comparisons across institutions to be easily made;

• a leverage ratio will be introduced as a supplement to the Basel II risk-based framework with a view to migrating to a Pillar 1 treatment based on appropriate review and calibration.

To ensure comparability, the details of the leverage ratio will be harmonised internationally, fully adjusting for differences in accounting.

18. We will also examine the use of “contingent capital” and comparable instruments as a potentially cost-efficient tool to meet a portion of the capital buffer in a form that acts as debt during normal times but converts to loss-absorbing capital during financial stress, thus acting as a shock-absorber for the capital position.

19. We will also assess the need for a capital surcharge to mitigate the risk of systemic banks.

Making global liquidity more robust

20. The crisis vividly demonstrated that adequate liquidity is a prerequisite for financial stability.

The drying up of liquidity at the level of financial institutions, countries and ultimately the global system caused the seizing up of credit provision and of financial flows.

Cross-border flows are often the most vulnerable during financial crisis, and emerging markets can face damaging volatility in foreign exchange and liquidity flows.

21. Just as strong capital is a necessary condition for banking system soundness, so too is a strong liquidity base.
Many banks that had adequate capital levels still experienced difficulties during the crisis because they did not manage their liquidity in a prudent manner.

The lesson is that banks’ resilience to system-wide liquidity shocks – affecting both market and funding liquidity – must be significantly increased and their management of this risk strengthened.

22. To this end, we are substantially raising the bar for global liquidity risk regulation:

The Basel Committee will issue by the end of 2009 a new minimum global liquidity standard.

This new regulatory framework introduces a liquidity coverage ratio that can be applied in a cross-border setting.

It establishes a harmonised framework to ensure that global banks have sufficient high-quality liquid assets to withstand a stressed funding scenario specified by supervisors.

• The Basel Committee will also formulate a structural ratio to address liquidity mismatches and promote a strong funding profile over longer-term horizons.

• This new standard complements the supervisory guidance for banks’ liquidity risk management practices, the implementation of which is being assessed in supervisory reviews.

23. Shortages of cross-border liquidity caused problems at the national level for many countries.

Ex ante measures to reduce the risk of instability are needed, as well as ex post mechanisms to provide a coordinated official response if shortages arise:

• Regulators and supervisors in emerging markets will enhance their supervision of banks’ operations in foreign currency funding markets.

• The Committee on the Global Financial System will investigate policy options to reduce system-wide cross-border liquidity risk, including through strengthening the infrastructure of the foreign exchange swaps market and other aspects of funding liquidity markets.

• National and regional authorities and the international financial institutions will use the results of this investigation to review together the scope for improved cooperation over liquidity provision when liquidity shortages arise.

Reducing the moral hazard posed by systemically important institutions

24. Notwithstanding the actions above to strengthen capital and liquidity, additional steps are needed to reduce the moral hazard risks and economic damage associated with institutions that are “too big to fail” (or, more accurately, too big and too complex to fail).

25. Action in this area is essential to contain the costs to governments and economies of future crises.
We will develop over the next 12 months measures that can be taken to reduce the systemic risks these institutions pose.
Possible measures include specific additional capital, liquidity and other prudential requirements as well as other measures to reduce the complexity of group structures and, where appropriate, encourage stand-alone subsidiaries.

More intense and internationally coordinated regulation and supervision of firms presenting greater risks can help to reduce the probability of their failure.

26. For all major cross-border firms we will require the development of specific contingency plans that aim at preserving the firm as a going concern, promoting the resiliency of key functions and facilitating rapid resolution or wind-down, should that prove necessary.

The Basel Committee’s consultation document on cross border bank resolution proposes specific actions to achieve an effective, rapid and orderly wind-down of large cross-border financial firms.

27. We will assess the implications of different responses for systemic cross-border institutions with different group structures, and the impact of these different measures for the stability and efficiency of cross-border capital flows.

We ask you to support us in this important future work.

Strengthening accounting standards

28. In April 2009, the G20 Leaders stated that standard setters should “make significant progress towards a single set of high quality global accounting standards.”

There is significant progress in this area and nearly all FSB member jurisdictions have programmes underway to converge with or adopt the standards of the International Accounting Standards Board (IASB) by 2012.

29. In addition, the G20 Leaders welcomed the FSF’s procyclicality recommendations relating to accounting and called on “accounting standard setters to work urgently with supervisors and regulators to improve standards on valuation and provisioning and achieve a single set of high-quality global accounting standards.”

Important steps have been taken to improve existing standards and to enhance dialogue with prudential authorities.
But in some instances, achieving improved valuation and provisioning standards alongside the goal of convergence need further attention by standard setters.

30. At present, the IASB and the US Financial Accounting Standards Board (FASB) are considering a variety of approaches which could possibly lead to divergences between IASB and FASB standards with respect to:

• improving and simplifying financial instruments accounting, where FASB is considering an approach that is based on fair value measurement for most financial instruments, which would be proposed by early 2010, while the IASB has proposed a mixed model of historical cost and fair value, to be available for use in 2009 year-end financial statements;

• provisioning and impairment, where the IASB plans to propose a standard using an expected loss or expected cash flow approach to loan loss provisioning in October 2009, which would generally recognise credit losses earlier and mitigate procyclicality,1 whereas the FASB continues to consider changes to impairment recognition, including an approach based on fair value with plans to issue its proposal by early 2010;

off-balance sheet standards, where the IASB’s proposal on derecognition, which is now subject to consultation, would require repurchase agreements to be treated as sales and forward contracts in certain situations (thus leading to off-balance sheet treatment), instead of as financing transactions on the balance sheet as under current IASB and FASB standards.

31. Moreover, continuing differences in accounting requirements of the IASB and FASB for netting/offsetting of assets and liabilities also result in significant differences in banks’ total assets, posing problems for framing an international leverage ratio.

32. Therefore, additional work in the areas above is urgently needed in order to meet the important objectives of convergence, transparency and the mitigation of procyclicality, as standard setters continue their efforts to improve the quality of their standards and reduce the complexity of their standards on financial instruments.

33. We strongly encourage the IASB and FASB to agree on improved converged standards that will:

• incorporate a broader range of available credit information than existing provisioning requirements, so as to recognise credit losses in loan portfolios at an earlier stage as part of an effort to mitigate procyclicality.

We are particularly supportive of continued work on impairment standards based on an expected loss model; and

• simplify and improve the accounting principles for financial instruments and their valuation.
We are particularly supportive of continued work in a manner that does not expand the use of fair value in relation to the lending activities (involving loans and investments in debt instruments) of financial intermediaries.

34. While respecting the independence of accounting standard setters, the FSB is urging renewed efforts by the IASB and FASB to achieve these objectives, working with supervisors, regulators and other constituents.

The Basel Committee has issued for consideration by accounting standard setters principles for the revision of accounting standards for financial instruments, agreed by all G20 banking supervisors, that address issues related to provisioning, fair value measurement and related disclosures.

35. We welcome the IASB’s recent initiatives with respect to provisioning and its enhanced technical dialogue with prudential supervisors and other stakeholders, and encourage the IASB to continue its dialogue with stakeholders as it moves forward.

We request G20 Leaders to support the call for action set forth in this section.

Improving compensation practices

36. National regulatory and supervisory initiatives are being taken to implement the FSB Principles for Sound Compensation Practices.
The Principles call for wide ranging private and official sector action to ensure that governance of compensation is effective; that financial firms align their compensation practices with prudent risk taking; and that compensation policies are subject to
effective supervisory oversight and engagement by stakeholders.

37. Given competitiveness concerns, speedy and determined coordinated action in all major financial centres is needed to achieve effective global implementation of the Principles.

We must ensure that the Principles are rigorously and consistently implemented and applied to significant financial institutions and especially large, systemically relevant firms across the financial services sector.

38. To this end, we have set out in a separate report2 to the Summit specific implementation standards for the Principles, focusing on areas in which especially rapid progress is needed.

These cover:

• independent and effective board oversight of compensation policies and practices;

• linkages of the total variable compensation pool to the overall performance of the firm and the need
to maintain a sound capital base;

• compensation structure and risk alignment, including deferral, vesting and clawback arrangements;

• limitations on guaranteed bonuses;

• enhanced public disclosure and transparency of compensation; and

• enhanced supervisory oversight of compensation, including sanctions if necessary.

39. The Basel Committee, the International Association of Insurance Supervisors (IAIS) and the International Organization of Securities Commissions (IOSCO) will undertake measures to support implementation.

40. We will undertake a FSB thematic peer review of actions taken by national authorities to implement our Principles and implementation standards.

We will assess whether these actions have had their intended effect and propose additional measures as required.
This review will be completed in March 2010.

41. These actions are in addition to our call for banks to conserve capital by limiting bonus payments today and so be in a better position to meet future additional capital requirements.

Expanding oversight of the financial system

42. In addition to strengthening the buffers in the banking system, work is progressing to ensure that, throughout the broader financial system, all systemically important activity is subjected to appropriate oversight and regulation.
In particular:

• Regarding hedge funds, regulators are working, including through IOSCO, to set out for consideration by legislatures a consistent framework for oversight and regulation of hedge funds and/or hedge fund managers, including requirements for mandatory registration, ongoing regulation, provision of information for systemic risk purposes, disclosure and exchange of information between regulators.
Regulators are coordinating their respective work in order to ensure the best possible consistency with regard to implementation of hedge fund regulation in different jurisdictions.

By March 2010, IOSCO will report on the level of implementation in these areas and on proposed industry standards.

• On credit rating agencies, regulators are working, including through IOSCO, to evaluate whether national and regional regulatory initiatives are consistent with the IOSCO Principles and Code of Conduct Fundamentals and to identify whether divergences between initiatives might cause conflicting compliance obligations for credit rating agencies.
Regulators should work together towards appropriate, globally compatible solutions as early as possible in 2010.

• Regarding the perimeter of regulation more generally, supervisors and regulators working through the Joint Forum will identify by end-2009 other key areas where the perimeter needs to be expanded.

• By the November 2009 meeting of G20 Finance Ministers and Central Bank Governors, the International Monetary Fund (IMF), Bank for International Settlements and FSB will have developed preliminary guidance for national authorities to assess the systemic importance of financial institutions, markets or instruments.

43. To guard against regulatory arbitrage, it is imperative that initiatives to expand the perimeter of regulation are effectively and consistently implemented across key jurisdictions.

The FSB will benchmark the regulations implemented in these jurisdictions to assess whether they are well aligned with each other.

Strengthening the robustness of the OTC derivatives market

44. Global regulatory efforts to reduce systemic risks in the over-the-counter (OTC) derivatives market have intensified since the London Summit.

Given the global nature of the market, international standards must be established and consistently applied to address these risks, and regulators must coordinate their efforts.

45. To these ends, the official sector will:

• strengthen capital requirements to reflect the risks of OTC derivatives and further incentivise the move to central counterparties and, where appropriate, organised exchanges.

The Basel Committee will issue new standards by mid-2010 to take full account of counterparty credit risks, the benefits of centrally cleared contracts and collateralisation.

Regulators need to ensure that equivalent rules are applied outside the banking sector;

• strengthen standards for central counterparties by mid-2010 to address the issues specific to clearing OTC derivatives, and develop international recommendations for OTC derivatives trade repositories, working through the Committee on Payment and Settlement Systems and IOSCO;

• coordinate efforts to oversee and apply international standards to OTC derivatives central counterparties and trade repositories. We strongly support the ongoing work of the OTC Derivatives Regulators’ Forum to develop international cooperative oversight frameworks by end-2009, including for sharing information among regulators and developing common expectations for data reporting; and

• identify legal or other impediments to implementing the OTC derivatives market reforms, which regulators or legislative authorities will then take action to resolve.

46. The private sector needs to meet its commitments to supervisors to expand central clearing of OTC derivatives trades; improve risk management for trades that are not cleared, meet increasingly stringent targets for operational improvements and report data on their performance to their regulators; and report all non-cleared trades to regulated trade repositories.

If they do not meet these and future commitments, supervisors will develop alternative approaches to ensure the improvements are made.

Re-launching securitisation on a sound basis

47. The revival of securitisation markets is needed in many countries to support the provision of credit to the real economy.
Although industry initiatives are underway to standardise terms and structures, reduce complexity and enhance transparency, the official sector must provide the framework that ensures discipline in the securitisation market as it revives.

48. To this end, during 2010, supervisors and regulators will

• implement the measures decided by the Basel Committee to strengthen the capital treatment of securitisation and establish clear rules for banks’ management and disclosure, including:

o higher risk weights for securitisations and re-securitisations;

o requirements on banks to conduct more rigorous due diligence of externally rated securitisations, with higher capital requirements imposed where this does not take place;

o tighter prudential guidance for bank management of off-balance sheet exposures arising from securitisation vehicles; and

o improved disclosures of securitisation exposures in the trading book, sponsorship of off-balance sheet vehicles, re-securitisation exposures, valuation assumptions and pipeline risks;

• implement IOSCO’s proposals to strengthen practices in securitisation markets, including by:

o reviewing the due diligence practices and associated disclosures of participants in the securitisation chain;

o better informing and protecting investors by requiring greater disclosure by issuers, including initial and ongoing information about underlying asset pool performance;

o reviewing and, as appropriate, strengthening investor suitability requirements;

o considering what enhancements are needed to regulatory powers to allow authorities to implement the recommendations in a manner promoting international coordination of regulation;

• examine other ways to align incentives of issuers with investors, including considering requirements on issuers of securitisations to retain a part of the economic exposure of the underlying assets;

• encourage greater use of the contractual form used in covered bonds, which tie issuers to the instruments by obliging them to act as the de facto guarantor in the event of underperformance by the underlying assets, provided that depositors are not disadvantaged;

• support implementation of industry initiatives to standardise terms and structures, reduce complexity and enhance transparency and, as securitisation markets restart, adjust measures as appropriate.

Adherence to international standards

49. The FSB will put in place by the end of 2009 a framework to strengthen adherence to international regulatory and prudential standards. The framework, which will build upon IMF and World Bank assessments, is envisaged to provide comprehensive and updated compliance information.

FSB member countries have agreed to lead by example in
disclosing their degree of compliance.

The FSB will report on the development of this framework at the November 2009 meeting of G20 Finance Ministers and Central Bank Governors.

50. We will apply this framework to identify non-cooperative jurisdictions with reference to cooperation, information exchange and other prudential standards, focusing on jurisdictions of concern due to weaknesses in compliance and systemic importance.

The FSB will work as quickly as possible to develop:

• a global compliance “snapshot” for the relevant standards building on Financial Sector Assessment Program (FSAP) assessments where available and other relevant information, by November 2009;

• criteria for identifying jurisdictions of concern by November 2009;

• procedures for an evaluation process to build on and complement FSAP assessments, to be launched by February 2010 at the latest; and

• a toolbox of measures to promote adherence and cooperation among jurisdictions, by February 2010 at the latest.

51. Within this framework, we are also developing a system of peer reviews among FSB members, based among other evidence on the findings of IMF and World Bank assessments, and will report on their outcome.

These will comprise both single-country and thematic reviews to assess our implementation of international financial standards and of policies agreed in the FSB and determine whether additional steps are needed to reach the intended results.
Both modalities will be developed in parallel. Actual reviews will start by end-2009 with the thematic peer review on the implementation of the FSB compensation principles.

The need for perseverance and consistent national implementation

52. While reforms are well underway, as we detail in a separate report, they are far from complete.

Effective work to strengthen the global financial system requires policies that are well designed and will be robust over the long run.

This necessarily takes time.

It is important, therefore, that Leaders send a strong message that they are determined to see these reforms through.

Where international policy development is ongoing, we need Leaders’ continued support; where such policy work has concluded, we need Leaders’ commitment to consistent national implementation.

Achieving our objectives of a well regulated open financial system requires the maintenance of a level playing field.
Delivering this is one of the reasons why the FSB exists.

However, the speed with which jurisdictions develop and change financial regulation differs, and consistency in what comes into place should not be taken for granted.
While the FSB can develop coherent policy proposals, only national authorities can assure implementation that is effective and
is consistent across borders.

Given the commitment we have all made to coherent approaches as we improve the regulation of the system, we must strive to overcome differences in our final rule making.
We will continue to take actions to ensure achievement of this end.

54. To maintain ongoing attention to this issue and foster the pace and consistency of implementation, we will launch a project to compare national implementation measures and identify cross-country differences and any need for policy actions to address them.

As our economies recover, it is crucial that national momentum for significant reforms be maintained.
The FSB will continue to work to ensure that the goals remain ambitious, that clear targets are set to move us forward towards those goals, and that their importance is not lost even if markets seem to be calmer for the time being.

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