Blog · Professional

Journal Entry, FSB Event at IMF-World Bank

Written on Monday, April 22, 2013
Event New Rules for Global Finance held during IMF-World Bank Spring meetings 2013

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The Financial Stability Board (FSB): Views from Insiders and from Campaigners

Key Points:

  • Michael Taylor, FSB Secretariat Staff illustrates the mandate of the FSB, the Regional Consultative Groups (RCGs) and the FSB’s work toward financial service regulations and fiscal policy implementation.
  • Grant Spencer, Deputy Director of the Reserve Bank of New Zealand lays out his concern over the FSB not suited to small countries.
  • Mr. Turalay Kenc, Deputy Governor of the Central Bank of the Republic of Turkey reveals the importance of accounting standards and credibility agencies.
  • H.E. Dr. Hasan, Deputy Governor of the Central Bank of Jordan advises that how he would like to see more credible policies being implemented by the FSB.
  • Lori Wallach, Director of Global Trade Watch at Public Citizen expresses concern regarding the gaps in financial services and market rules in developing countries.
  • Mr. Ajith Nivard Cabraal, Governor of the Bank of Sri Lanka addresses his concern over banking regulations and gives examples of productive counter policies.
  • See which panelist advocates an increase of the inclusion of Civil Society Organizations (CSOs) members in more input regarding financial stability reforms.
  • Questions for the panelists include: transparency and accountability for the FSB’s fiscal policies, concerns about trade regulations, Basel III’s impact after the 2008 crisis and more.

Summary:

Michael Taylor introduced the main goals and governance structure of the FSB, the work of peer reviews and the role of Regional Consultant Groups (RCGs) in the global community. Grant Spencer, Ajith Nivard Cabraal and H.E. Dr. Maher “Sheikh Hasan” expressed their concerns about the challenges small countries face regarding financial regulations because of their vulnerability in the global financial system. In addition, monetary policies in advanced economies create a huge challenge for small countries to manage capital flow.

H.E. Hasan pointed out the asymmetric regulation between different countries creating regulation arbitrage opportunities, which impose threats to global financial stability. He suggested that a stricter punishment policy be imposed on those who break derivative and banking regulations. On the issue of global financial stability, Mr. Cabraal recommends a buffer zone method be created to manage external shocks in order to deliver stability. Turalay Kenc addressed the importance of reforms on accounting standards and credit rating agencies, which Mr. Taylor fully supports.

Lori Wallach warned that bilateral trade agreements may lead to financial deregulation. She claimed that the ban on regulations on size, legal form and firewall give individual firm rights to challenge sovereign states. Ms. Wallach also advocated the necessity of capital controls as a response to the volatility of international capital flow, while Mr. Spencer insisted that capital controls should be the last resolution for indebted countries replying on foreign savings.

-> Video Recording via YouTube (click here)

-> Access Full Report (click here)

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