30 August 2021 | PDF full text (572 KB)
This report contains the FSB’s audited financial statements for the financial year 1 April 2020 to 31 March 2021. The report also details the FSB’s governance arrangements and its transparency and accountability mechanisms.
A detailed explanation of the activities undertaken to implement the mandate and tasks of the FSB is provided in the annual report on the implementation and effects of the G20 (post-2008 crisis) financial regulatory reforms, which will be published in November.
Macroprudential supervision is aimed at identifying and, where necessary, addressing both vulnerabilities of individual insurers and the insurance sector to shocks from the external environment (inward risks) and the build-up of systemic risk at the individual insurer level or within the sector as a whole that may be transmitted to the external environment (outward risks).
This Application Paper on Macroprudential Supervision provides further guidance on the supervisory material related to macroprudential supervision in Insurance Core Principle (ICP) 24. As part of the holistic framework for the assessment and mitigation of systemic risk in the insurance sector, the IAIS revised ICP 24 to more explicitly address, among others, the build-up and transmission of systemic risk at the individual insurer and sector-wide level. The Holistic Framework and ICP 24 were adopted by the IAIS Annual General Meeting in November 2019.
20 August 2021 | PDF full text (323 KB)
Access to FMI services is essential for banks to be able to continue performing their critical functions or critical services under all circumstances, including in cases where banks need to be resolved.
In 2017, the FSB published its Guidance on Continuity of Access to Financial Market Infrastructures for a Firm in Resolution. The Guidance sets out arrangements and safeguards to facilitate continuity of access to FMI services for a firm in resolution with a view to maintaining the firm’s critical functions that rely on the continued access to FMI services. As part of implementing the Guidance, authorities and firms (as FMI service users) develop plans to facilitate continuity of access in resolution. This requires information about the nature of the FMI service user’s relationship with both FMIs and FMI intermediaries on the arrangements and safeguards that would affect an FMI service user’s access to FMI services in the run-up to, and during, its resolution.
Following a workshop held in May 2019 with stakeholders about the implementation of the Guidance, the FSB developed a questionnaire for FMIs to aid resolution planning for firms that use FMI services and their resolution authorities (RAs), which has now been revised. FMI intermediaries were out of scope of that questionnaire, in view of the more bespoke nature of their relationships with FMI service users.
Following on from this, the FSB has considered how it can most effectively support firms and RAs in accessing the information they need from FMI intermediaries to prepare their resolution plans, and how it can support FMI intermediaries in meeting the needs of their clients and their clients’ RAs.
The framework set out in the document published today seeks to help FMI intermediaries better understand which information clients and their RAs may need from them. It does so by providing an overview of the baseline information that is potentially relevant for clients and RAs, which they and FMI intermediaries can then discuss, as needed, in their bilateral engagement. Thus the framework makes it more predictable for FMI intermediaries which topics could be part of information requests from their clients and/or from their clients’ RAs. This could potentially allow them to identify opportunities to streamline their response process, reducing the resources required to provide this information.
As part of our outreach, the FSB will host a webinar for stakeholders on this Framework on 16 September 2021. Representatives of FMI service providers, FMI service users and authorities who would like to attend should contact [email protected] for more details.
This questionnaire updates the previous questionnaire for FMIs, which was published in August 2020. It has been revised following an evaluation of stakeholders’ first experiences with the process via an online survey in April 2021. While a large majority of respondents (from various perspectives) indicated that the questionnaire template was useful, a number of suggestions were also made. To the extent feasible, these have been incorporated as clarifications or amendments to the introductory section. No major changes have been made to the questionnaire itself – this keeps the burden for FMIs low when they next update their responses.
The questionnaire was developed in consultation with FMIs, FMI participants and FMI oversight authorities. It covers general information on the FMI and its legal structure; (the rulebook/contractual provisions regarding termination; and arrangements and operational processes to facilitate continued access in resolution. It is designed to reduce the burden of duplicative information-gathering efforts by streamlining the collection of certain baseline information relevant to continuity of access in resolution. The questionnaire aims to reduce the “many to one” nature of inquiries from FMI participants and authorities to FMIs for resolution planning and streamline the provision of this information from FMIs to firms and authorities through the use of a common template.
All FMIs are encouraged to complete the questionnaire and to publish their responses, or to make them available in other ways to FMI service users and resolution authorities to inform their resolution planning.
The FSB emphasises that if an FMI chooses not to complete the questionnaire, it should be prepared to respond to its clients’ (and their resolution authorities’) information requests within reasonable deadlines as mutually agreed.
The framework seeks to help financial market infrastructure (FMI) intermediaries better understand which information clients and their resolution authorities (Ras) may need from them. It does so by providing an overview of the baseline information that is potentially relevant for clients and RAs, which they and FMI intermediaries can then discuss, as needed, in their bilateral engagement. Thus the framework makes it more predictable for FMI intermediaries which topics could be part of information requests from their clients and/or from their clients’ RAs. This could potentially allow them to identify opportunities to streamline their response process, reducing the resources required to provide this information.
The questionnaire was developed in consultation with financial market infrastructures (FMIs), FMI participants and FMI oversight authorities. It covers general information on the FMI and its legal structure; the rulebook/contractual provisions regarding termination; and arrangements and operational processes to facilitate continued access in resolution. It is designed to reduce the burden of duplicative information-gathering efforts by streamlining the collection of certain baseline information relevant to continuity of access in resolution. The questionnaire aims to reduce the “many to one” nature of inquiries from FMI participants and authorities to FMIs for resolution planning and streamline the provision of this information from FMIs to firms and authorities through the use of a common template.
18 August 2021
On 30 June 2021, the FSB published Policy proposals to enhance money market fund resilience: Consultation Report. Interested parties were invited to provide written comments by 16 August 2021. The public comments received are available below.
The FSB thanks those who took the time and effort to express their views. The FSB expects to publish the final policy proposals in October 2021.
13 August 2021
On 1 September the FSB hosted a virtual outreach workshop to discuss the FSB’s interim lessons learnt report. The report identifies preliminary lessons from the COVID-19 experience and aspects of the functioning of the G20 financial reforms that may warrant attention at the international level. Stakeholder feedback will help inform the FSB’s final report, which will be published ahead of the G20 Summit in October 2021.
9 August 2021 | PDF full text (153 KB)
On 18 and 19 May 2021, the Financial Stability Board (FSB) hosted an industry virtual workshop as a part of its regular assessment of the effectiveness of the implementation of the FSB’s Principles for Sound Compensation Practices and their Implementation Standards.
The workshop was an opportunity to exchange information on key compensation issues and challenges for the effective alignment of risk and compensation, with an additional focus on the impact of the pandemic on firms’ compensation practices. The workshop covered:
Non-financial criteria and measures, behaviours and firm culture – Participants identified trends in the use of non-financial criteria, potential differences across sectors and how these criteria affect and are affected by firm culture.
Effective alignment of risk and compensation – Participants identified effective practices for alignment between risk and compensation and how practices may vary across sectors.
Legal and regulatory issues – The discussion focused on the most significant legal and regulatory impediments to the use of compensation tools, such as malus and clawback and possible steps to address these. The session also explored firms’ use of severance pay.
COVID-19 and compensation – Participants discussed compensation-related actions firms and supervisors have taken in relation to COVID-19.
The discussions from the workshop are an input into the FSB’s ongoing work on identifying effective practices and enhancements to compensation frameworks.
29 July 2021
On 12 July 2021 the FSB hosted a virtual workshop to discuss its consultation report on its policy proposals to enhance money market fund (MMF) resilience.
The objective of the workshop was for officials from FSB member authorities involved in the preparation of the consultation report to exchange views with industry representatives, academics and other stakeholders on the analysis of MMF vulnerabilities and on the policy options to address them.
More details on the workshop can be found in the agenda. The workshop, together with written consultation responses, will inform the final FSB report, which will be published ahead of the G20 Summit in October 2021.