FSB updates G20 on its work related to cyber incident response and recovery

28 May 2019

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Ref no: 14/2019

The Financial Stability Board (FSB) today published a progress report on its work on developing effective practices for financial institutions’ response to, and recovery from, a cyber incident, which it has delivered to G20 Finance Ministers and Central Bank Governors ahead of their meetings in Fukuoka on 8-9 June.

As part of its work programme to enhance the cyber resilience of financial institutions, the FSB is developing a toolkit of effective practices relating to a financial institution’s response to, and recovery from, a cyber incident. The toolkit also aims to help supervisors and other relevant authorities in supporting financial institutions before, during and after a cyber incident.

This project seeks to mitigate the implications of cyber incidents on financial stability, by taking into account their cross-border and cross-sectoral nature. It will also leverage on the shared experience and diversity of perspectives gathered in the course of this work. The development of effective practices will draw on a stocktake of publicly released guidance from national authorities and international bodies, a review of case studies on past cyber incidents and various engagements with external stakeholders.

As part of its outreach, the FSB will launch an online survey in July which will help to identify effective practices at financial institutions. A public consultation on the report will be launched in early 2020, and the toolkit of effective practices will be finalised in late 2020.

Notes to editors

This initiative builds on previous FSB work to enhance cyber resilience of financial institutions to promote financial stability. Following a stocktake of publicly available regulations, guidance and supervisory practices on cyber security in the financial sector in 2017, the FSB published the Cyber Lexicon in November 2018 to help build a common language to support the work of the FSB, standard-setting bodies, authorities and private sector participants to address financial sector cyber resilience. The Lexicon comprises a set of approximately 50 core terms related to cyber security and cyber resilience in the financial sector and will be used in the development of effective practices for cyber incident response and recovery.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

Cyber Incident Response and Recovery: Progress Report to the G20 Finance Ministers and Central Bank Governors

| PDF full text (395 KB)

This progress report, delivered to G20 Finance Ministers and Central Bank Governors ahead of their meetings in Fukuoka on 8-9 June, provides an update on the FSB’s work on developing effective practices for financial institutions’ response to and recovery from a cyber incident.

As part of its work programme to enhance the cyber resilience of financial institutions, the FSB is developing a toolkit of effective practices relating to a financial institution’s response to, and recovery from, a cyber incident. The toolkit also aims to help supervisors and other relevant authorities in supporting financial institutions before, during and after a cyber incident.

This project seeks to mitigate the implications of cyber incidents on financial stability, by taking into account their cross-border and cross-sectoral nature. It will also leverage the shared experience and diversity of perspectives gathered in the course of this work. The development of effective practices will incorporate a stocktake of publicly released guidance from national authorities and international bodies, a review of case studies on past cyber incidents and various engagements with external stakeholders.

As part of its outreach, the FSB will launch an online survey in July which will help to identify effective practices at financial institutions. A public consultation on the report will be launched in early 2020, with a view to finalising the toolkit of effective practices in late 2020.

Evaluation of too-big-to-fail reforms: Summary Terms of Reference

23 May 2019 | PDF full text (219 KB)

This summary terms of reference provides details about the objectives, scope and process of the FSB’s evaluation of too-big-to-fail (TBTF) reforms. The evaluation will assess whether the implemented reforms are reducing the systemic and moral hazard risks associated with systemically important banks (SIBs). It will also examine the broader effects of the reforms to address TBTF for SIBs on the overall functioning of the financial system.

Stakeholder outreach will be an important aspect of the evaluation, including through workshops to exchange views with relevant stakeholders on this topic and through this call for public feedback.

Feedback, including evidence in support of the responses, should be submitted by 21 June 2019 to [email protected] under the subject heading “TBTF evaluation”. Responses will be published on the FSB’s website unless respondents expressly request otherwise. The feedback will be considered by the FSB as it prepares the draft report, which will be issued for public consultation in June 2020. The final report will be published in late 2020.

FSB launches evaluation of too-big-to-fail reforms and invites feedback from stakeholders

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Ref no: 13/2019

The Financial Stability Board (FSB) is seeking feedback from stakeholders as part of its evaluation of the effects of the too-big-to-fail (TBTF) reforms for banks that were agreed by the G20 in the aftermath of the global financial crisis. The evaluation, which is being carried out by a working group chaired by Claudia Buch (Vice-President of the Deutsche Bundesbank), will assess whether the implemented reforms are reducing the systemic and moral hazard risks associated with systemically important banks (SIBs). It will also examine the broader effects of the reforms to address TBTF for SIBs on the overall functioning of the financial system. More details on the evaluation can be found in the summary terms of reference.

Stakeholder outreach will be an important aspect of the evaluation, including through workshops to exchange views with stakeholders on this topic and through this call for public feedback. In particular, the FSB invites feedback from banks, other financial institutions, academics, think tanks, industry and consumer associations on the following issues:

  1. To what extent are TBTF reforms achieving their objectives as described in the terms of reference? Are they reducing the systemic and moral hazard risks associated with SIBs? Are they enhancing the ability of authorities to resolve systemic banks in an orderly manner and without exposing taxpayers to loss, while maintaining continuity of their economic functions? What evidence can be cited in support of your assessment?

  2. Which types of TBTF policies (e.g. higher loss absorbency, more intensive supervision, resolution and resolvability, other) have had an impact on SIBs and how? What evidence can be cited in support of your assessment?

  3. Is there any evidence that the effects of these reforms differ by type of bank (e.g. global vs domestic SIBs)? If so, what might explain these differences?

  4. What have been the broader effects of these reforms on financial system resilience and structure, the functioning of financial markets, global financial integration, or the cost and availability of financing? What evidence can be cited in support of your assessment?

  5. Have there been any material unintended consequences from the implementation of these reforms to date? What evidence is available to substantiate this?

  6. Are there other issues relating to the effects of TBTF reforms that are not covered in the questions above and on which you would like to provide your views? Please substantiate your comments with evidence.

Feedback, including evidence in support of the responses, should be submitted by 21 June 2019 to [email protected] under the subject heading “TBTF evaluation”. Responses will be published on the FSB’s website unless respondents expressly request otherwise. The feedback will be considered by the FSB as it prepares the draft report, which will be issued for public consultation in June 2020. The final report will be published in late 2020.

Notes to editors

Following the global financial crisis, the G20 launched a comprehensive programme of financial reforms to increase the resilience of the global financial system, while preserving its open and integrated structure. With the post-crisis reforms nearly complete and their implementation well under way, an analysis of the effects of these reforms is becoming possible. To that end, the FSB published in July 2017 a framework for the post-implementation evaluation of the effects of the G20 financial regulatory reforms.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

FSB Americas group discusses regional vulnerabilities, market fragmentation, SME finance and correspondent banking

17 May 2019

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Ref no: 13/2019

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Americas met in Buenos Aires today at a meeting hosted by the Central Bank of Argentina. FSB Chair Randal K. Quarles joined RCG members for the meeting.

The group received an update on the FSB’s work programme and the deliverables to the June G20 meetings in Japan. The FSB’s work programme in 2019 is focused on new and emerging vulnerabilities and how they may be addressed; finalising and operationalising post-crisis reforms; evaluating the effects of the reforms; and enhancing the FSB’s transparency and external outreach.

Members received an update on the RCG’s working group on non-bank financial intermediation (NBFI) which annually surveys NBFI trends and developments in the region. The RCG discussed the outcomes of the last meeting of the working group held on 19 March, and the future work to be undertaken by the working group.

The group then discussed global and regional financial market developments and vulnerabilities, their potential impact on the economies in the region and possible policy responses. They were briefed on the FSB’s recent assessment of global vulnerabilities, which had noted with concern the loosening in lending standards, elevated asset values, and high private and public debt.

Members of the group discussed the FSB’s ongoing work on market fragmentation. Coordinated action by financial authorities in the aftermath of the global financial crisis has strengthened the global financial system. However, there are concerns that some markets have become fragmented along jurisdictional lines. RCG members discussed the FSB’s draft report on potential issues around market fragmentation and approaches to address them, and exchanged experiences on fragmentation issues in the region.

Members of the group discussed progress in implementation of the FSB-coordinated action plan to assess and address the decline in correspondent banking relationships and follow-up to the associated recommendations to address remittance service providers’ access to banking services. They emphasised the importance of this issue for many countries in the region.

The group provided feedback on the FSB’s draft consultation report on its evaluation of the effects of the post-crisis financial regulatory reforms on financing for small and medium-sized enterprises (SMEs), which will be published in the coming weeks. The report is the latest in a series of FSB evaluations of the effects of the reforms; it will be followed by an evaluation, to be completed in 2020, of the effects of reforms designed to end too-big-to-fail for banks.

Finally, the meeting provided an opportunity for FSB Chair Quarles to hear suggestions from members about how to enhance the ways that the RCGs provide feedback to the FSB. This year the FSB is conducting a review, with the involvement of members of the FSB’s six RCGs, of how to enhance the effectiveness of RCGs as an outreach and feedback mechanism.

The FSB RCG for the Americas is co-chaired by Guido Sandleris, Governor, Central Bank of Argentina and John Rolle, Governor, Central Bank of The Bahamas. Membership includes financial authorities from Argentina, Bahamas, Barbados, Bermuda, Bolivia, Brazil, British Virgin Islands, Canada, Cayman Islands, Chile, Colombia, Costa Rica, Guatemala, Honduras, Jamaica, Mexico, Panama, Paraguay, Peru, Trinidad and Tobago, the United States of America and Uruguay.

Notes to editors

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and Sub-Saharan Africa. [←]

Europe RCG discusses artificial intelligence, financial vulnerabilities and FSB work programme

9 May 2019

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Ref no: 12/2019

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for Europe met in Bucharest at a meeting hosted by the National Bank of Romania on 7 May. The meeting started with an address from Mugur Isărescu, Governor of the National Bank of Romania.

The group considered implications of the growing use of artificial intelligence, machine learning and big data for the regulation and supervision of the financial system. Recognising that these innovations are important drivers of change for the financial industry, members explored risks and opportunities that these innovations could entail for financial stability.

Members of the RCG then discussed global and regional financial vulnerabilities and their potential impact on European economies. While financial markets have functioned robustly during the period of volatility in late 2018 and near-term conditions in emerging markets have stabilised, members highlighted potential financial stability risks against the backdrop of rising debt levels, the weakening of lending standards in some markets, and continued global political uncertainty. The group also exchanged views on possible policy responses, including assessments of potential vulnerabilities linked to high global indebtedness and more specifically to the markets for leveraged loans and collateralised loan obligations (CLOs). The meeting considered the steps authorities are taking to address identified risks.

The group received an update on the FSB’s work programme and the deliverables to the June G20 meetings in Japan. The FSB’s work programme in 2019 is focused on new and emerging vulnerabilities, including potential financial stability issues arising from market fragmentation and from FinTech, and how they may be addressed; finalising and operationalising post-crisis reforms; evaluating the effects of the reforms on, for example, financing to small and medium-sized enterprises; and correspondent banking.

Finally, members discussed ways to enhance the effectiveness of RCG groups. As part of the FSB’s broader efforts to strengthen external stakeholder outreach, the discussion will help to identify ways in which jurisdictions that are not members of the FSB can effectively contribute to the FSB’s work and provide feedback on its direction.

The RCG Europe is co-chaired by Luigi Federico Signorini, Deputy Governor, Bank of Italy and Marek Mora, Deputy Governor, Czech National Bank. The membership of the FSB Regional Consultative Group for Europe includes financial authorities from Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Ukraine, United Kingdom and the Group of International Finance Centre Supervisors. The European Commission, the European Central Bank and the ECB Banking Supervision also attended the meeting.

Notes to editors

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and sub-Saharan Africa. [←]

FSB RCG for the MENA discusses market fragmentation, reforms to interest rate benchmarks and financial stability surveillance frameworks

4 May 2019

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Ref no: 11/2019

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Middle East and North Africa (MENA) met in Istanbul today at a meeting hosted by the Central Bank of the Republic of Turkey.

Members of the FSB RCG MENA received an update on the FSB’s work programme and deliverables to the June G20 meetings next month in Japan. The FSB’s work programme in 2019 is focused on new and emerging vulnerabilities, including potential financial stability issues arising from market fragmentation and FinTech, and how they may be addressed; finalising and operationalising post-crisis reforms; evaluating the effects of the reforms on, for example, financing to small and medium-sized enterprises; correspondent banking; and reinforcing outreach to stakeholders.

Turning to vulnerabilities and regional financial stability issues, meeting participants discussed risks associated with a loosening of credit standards and political uncertainties. At the same time, they noted that resilience in the financial system appears to have increased, financial markets are functioning robustly and near-term conditions in emerging markets have stabilised. From a regional perspective, members discussed the potential impact of trade issues and changes in commodities prices.

Members next considered market fragmentation and its impact on financial stability, including inefficiencies, deviations in prices and pools of liquidity and capital that are unable to move freely in times of stress. The group discussed causes of market fragmentation, such as cross-country differences in information requirements and ring fencing by national authorities, and possible approaches to address it, including considering fragmentation more systematically as part of implementation monitoring and greater supervisory cooperation.

The group discussed reforms to major interest rate benchmarks. Attempted market manipulation, false reporting and declining liquidity in the earlier part of this decade had led to a decline in confidence surrounding their reliability and robustness. Members exchanged experiences on the use of LIBOR in their financial systems and whether financial institutions will be ready for its discontinuation in 2021.

The group discussed financial stability surveillance frameworks to identify, assess and address new and emerging risks to financial stability. They exchanged views on the elements of such frameworks and their need to be forward looking and proactive, while at the same time being sufficiently flexible to capture new and emerging risks. Frameworks used by authorities in Qatar and Morocco served as useful examples.

Finally, members discussed ways in which the FSB’s outreach through its RCGs could be strengthened. This would include, for example, promoting continued seniority of representation within the RCGs and encouraging non-FSB members to make contributions and give feedback on the direction of the FSB’s work.

The RCG for the MENA is co-chaired by Murat Çetinkaya, Governor of the Central Bank of the Republic of Turkey, and Abdulla Saoud Al-Thani, Governor of the Qatar Central Bank. Membership includes financial and regulatory authorities from Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates.

Notes to editors

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and sub-Saharan Africa. [←]

Sub-Saharan Africa group meets to discuss FSB activities, regulatory developments and financial vulnerabilities

3 May 2019

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Ref no: 10/2019

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for Sub-Saharan Africa held a meeting on 2-3 May in Balaclava, Mauritius, hosted by the Bank of Mauritius.

The RCG started with a discussion about the FSB’s work programme and activities for 2019. Members considered the FSB’s work to address new and emerging vulnerabilities in the financial system including FinTech developments and cyber resilience. RCG members were updated on the FSB’s work to evaluate the effects of the post-crisis reforms, in particular an ongoing evaluation of the impact on financing of small and medium-sized enterprises.

The meeting then discussed the work the FSB is undertaking that looks at examples of financial activities where supervisory practices and regulatory policies may give rise to market fragmentation. Members of the group discussed the preliminary conclusions from the work and issues that may be of relevance to the region.

Members discussed ways to improve the effectiveness of the RCGs as part of the FSB’s broader effort to enhance engagement with stakeholders. The discussion will feed into the FSB’s ongoing work to consider ways in which jurisdictions that are not members of the FSB can contribute to the direction of the FSB’s work.

The meeting further discussed global and regional macroeconomic and financial market developments. Members highlighted potential financial stability risks against the backdrop of rising public debt levels, weakening of fiscal and external buffers, trade tensions, risks associated with sharp increases in the cost of credit and the high level of political uncertainties, and exchanged views on possible policy responses.

The RCG then considered issues and implementation challenges for developing countries that choose to implement the Basel framework. Members acknowledged the specific characteristics of the countries in the region which need to be carefully considered when designing their own regulatory framework.

The meeting concluded with a discussion on the use of cloud computing in the financial sector. While adoption by regulated financial institutions appears to have been limited, anecdotal evidence suggests this is changing. Members of the group discussed risks such as the sharing of sensitive data, the cross-border nature of service provision and the concentration of cloud service providers as risks that supervisors need to consider. The RCG discussed regulatory frameworks for outsourcing to cloud service providers including governance, risk management and information security.

The FSB RCG for Sub-Saharan Africa is co-chaired by Lesetja Kganyago, Governor, South African Reserve Bank and Moses Pelaelo, Governor, Bank of Botswana. Membership includes financial authorities from Angola, Botswana, Ghana, Kenya, Mauritius, Namibia, Nigeria, South Africa, Tanzania, Uganda and Zambia as well as the Central Bank of West African States (BCEAO) and the Bank of Central African States (BEAC). Permanent observers include the Committee of Central Bank Governors of the Southern African Development Community, and the East African Community.

Notes to editors

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and sub-Saharan Africa. [←]

FSB designates DSB as Unique Product Identifier (UPI) Service Provider

2 May 2019

Press enquiries:
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Ref no: 9/2019

At its meeting on 26 April in New York, the FSB designated The Derivatives Service Bureau (DSB) Ltd (DSB) as the service provider for the future UPI system. This is a key step in completing the governance framework for the UPI. As the sole issuer of UPI codes, DSB will also perform the function of operator of the UPI reference data library.

A UPI will be assigned to an over-the-counter (OTC) derivatives product and used for identifying the product in transaction reporting data. This will enable authorities to aggregate data on OTC derivatives transactions by product or by any UPI reference data element. Such aggregation will facilitate the effective use of OTC trade reporting data, including helping authorities assess systemic risk and detect market abuse.

The designation of DSB comes after the FSB publicly invited prospective UPI service providers in July 2018 to submit self-assessments.1 It is based on an assessment process undertaken by the FSB’s Working Group on Unique Transaction Identifier (UTI) and UPI Governance (GUUG), with advice from the Technical Assessment Sub-Group of the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) working group for the harmonisation of key OTC derivatives data elements.

The FSB has also decided that the data standard for the UPI code and the UPI reference data elements will be set as international data standards and has identified the International Organization for Standardization (ISO) as the body responsible for publishing and maintaining these standards as international data standards.

In the coming period, the FSB, through the GUUG, will also engage with DSB and a range of authorities to ensure that DSB is subject to appropriately rigorous oversight arrangements and that its existing governance and consultative systems are adapted to the specific features of the UPI system, as set out in the FSB’s governance criteria and the CPMI and IOSCO technical guidance.

Notes to editors

DSB, a United Kingdom registered company, is a subsidiary of the Association of National Numbering Agencies (ANNA). ANNA monitors national numbering agencies for compliance with various standards on behalf of ISO and has substantial background with other financial identifiers. DSB generates ISO 6166 International Securities Identification Numbers (ISINs) for OTC derivatives. DSB is a numbering agency designed to operate on a global basis.

G20 Leaders agreed at the Pittsburgh Summit in 2009, as part of a package of reforms to the OTC derivatives markets, that all OTC derivatives transactions should be reported to trade repositories (TRs). A lack of transparency in these markets was one of the key problems identified by the financial crisis. Trade reporting, by providing authorities with data on trading activity, is a key part of efforts to identify and address financial stability risks from these markets.

The final report of the FSB’s Aggregation Feasibility Study published in September 2014 recommended a number of key preparatory steps that should be undertaken to enable effective global aggregation of OTC derivatives trade reporting data. In particular, the study noted that, irrespective of decisions on global aggregation, it is important that the work on standardisation and harmonisation of important data elements be completed, including the creation of a UPI and UTI, and the global introduction of a legal entity identifier (LEI). The study noted that these steps would also provide broader benefits for the reporting and usability of TR data, beyond the benefit of permitting authorities to aggregate data globally.2

The FSB noted in its work programme for 2019 that finalising governance arrangements for the UPI, and identification of one or more UPI service providers by mid-2019 would prepare for FSB further consideration in 2020 of the potential development of a global aggregation mechanism for trade reporting.

The UPI technical guidance was issued by CPMI and IOSCO in 2017 (UPI Technical Guidance).3

The FSB set out the key governance criteria and governance functions in the Explanatory Note to the self-assessment for prospective UPI service providers, published in July 2018.4

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. FSB (July 2018), Self-assessment questionnaire for prospective UPI Service Providers. [←]
  2. FSB (2014), Feasibility study on approaches to aggregate OTC derivatives data. [←]
  3. See CPMI and IOSCO (2017), Technical Guidance: Harmonisation of the Unique Product Identifier. [←]
  4. FSB (July 2018), Self-assessment questionnaire for prospective UPI Service Providers. [←]