Chairman: FSB to develop policy to protect global financial system

The chairman of the Financial Stability Board (FSB) Monday evening said the international community would develop policy to tackle the danger of banks being too big to fail in the global financial framework. FSB chairman Mark Carney, who is also Governor of the Bank of England, said FSB members had discussed the roadmap laid out at the G20 St Petersburg Summit to tackle systemically important financial institutions and to develop proposals for the meeting of the G20 nations at the Brisbane Summit in November on the adequacy, composition and location of gone-concern loss-absorbing capacity for global systemically important banks. In addition, Carney said a framework would be created for the cross-border recognition of resolution actions. He said industry would be asked to develop a proposal for a contractual approach before the next FSB Plenary meeting in September. The FSB would also make a report on the problem of cross-border impacts of reforms and regulations on financial institutions and markets in third countries. The FSB was set up in 2009 to coordinate at an international level the work of national financial authorities and international standard setting bodies. 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.