To G20 Leaders

Progress of Financial Regulatory Reforms

The FSB and its members have continued to make good progress on the broad program of financial reforms started at the Washington Summit. The Cannes Summit marks delivery of internationally agreed policy measures to markedly reduce the risks posed by systemically important financial institutions (SIFIs). These include polices to address distress and failure at such firms without disruption to the financial system and without taxpayer support. These are essential reforms to foster a more disciplined and appropriately incentivized financial system.

We have also made progress this year to ready implementation of the Basel III standards, advance reform of derivatives markets, implement reforms of compensation practices, and to prepare more effective oversight and regulation of shadow banking system.

However, we have a long way to go to fully and consistently implement the reforms we have committed to and the policy measures already agreed. Your continued strong determination to see through the necessary changes in laws, regulations and supervisory practices remains essential to reduce systemic risks globally.

Last year you asked the FSB to bring forward proposals for strengthening its capacity, governance and resources so that it can fulfil its mandate and meet growing demands. I have reported to finance ministers and central bank governors on the progress made and set out at the end of this letter further steps for your consideration. Continue reading