G20 wants proposals on loss-absorbing capacity of global financial institutions by end-2014
MOSCOW. Sept 6 (Interfax) - The leaders of the G20 countries have called on the Financial Stability Board (FSB) to consult with standard-setting bodies to assess and develop proposals on the adequacy of global systematically important financial institutions' loss-absorbing capacity when they fail by 2014, according to the G20 Leaders' Declaration.
"We recognize that structural banking reforms can facilitate resolvability and call on the FSB, in collaboration with the IMF and the OECD, to assess cross-border consistencies and global financial stability implications, taking into account country-specific circumstances, and report to our next Summit," the document said.
"We renew our commitment to make any necessary reforms to implement fully the FSB's Key Attributes of Effective Resolution Regimes for all parts of the financial sector that could cause systemic problems. We will undertake the necessary actions to remove obstacles to cross-border resolution. We reaffirm our commitment to ensure that supervisors have strong mandates, adequate resources and independence to act," the declaration said.
"We reiterate our commitment to implement Basel III according to internationally agreed timelines and welcome the progress that has been made since Los Cabos. It is imperative that the Basel III standards are consistently applied. We therefore welcome the work of the Basel Committee on Banking Supervision (BCBS) to assess the consistency of jurisdictions' rules with Basel III and their updated progress report on Basel III implementation. We also welcome the recent BCBS report on the regulatory consistency of risk-weighted assets. We look forward to the work by the BCBS to improve comparability of regulatory capital ratios. We expect the BCBS to finalize its proposals on the remaining components agreed to in the Basel III framework - the internationally harmonized leverage ratio and the net stable funding ratio - in line with agreed timelines and procedures," the declaration said.
"We ask the FSB, in consultation with the International Organization of Securities Commissions (IOSCO) and other standard setting bodies, to develop for public consultation methodologies for identifying global systemically important non-bank non-insurance financial institutions by end-2013. We call on the Committee on Payment and Settlement Systems and IOSCO to continue their work on systemically important market infrastructures," the G20 leaders said.