On July 3, 2017, international body for global financial system, Financial Stability Board (FSB) submitted its status report to G20 on progress in financial regulatory reforms in various jurisdictions, including India. FSB has listed India among countries that are ‘compliant or largely compliant’ on implementation of priority area reforms.
More Information from FSB Reform Report:
- The report listed India as a ‘compliant’ jurisdiction with regard to the Basel III reforms in area of risk-based capital and as ‘largely compliant’ on liquidity coverage ratio.
- Argentina, Australia, Brazil, Canada, China, Hong Kong, Indonesia, Japan, Mexico, South Korea, Russia, Singapore, South Africa, Switzerland, Turkey and the US have been found to be ‘compliant or largely compliant’ with regard to the Basel III reforms in area of risk-based capital and liquidity coverage ratio, whereas France, Germany, Italy, the Netherlands, Spain and the UK have been found to be ‘materially non-compliant’ on at least one parameter.
- On compensation related reforms, India is among the jurisdictions where “all except a few (three or less) FSB Principles and Standards have been implemented”.
- On trade reporting in the over-the-counter derivatives market, India was among the countries where necessary regulatory framework was being implemented.
- FSB examined progress in implementing G20 reforms in recent peer reviews of three EMDE (Emerging Market and Developing Economies) members — Argentina, Brazil and India — and has made recommendations to address identified gaps.
- FSB has outlined that jurisdictions including India, that have not had an IMF-World Bank Financial Sector Assessment Program (FSAP) in the last five years are undergoing one in 2017-19.
- FSB also released a Framework for post- implementation evaluation of the effects of the G20 financial regulatory reforms, which will guide analyses of whether the G20 reforms are achieving their intended outcomes.
- As per the report, maintaining an open and integrated global financial system, market liquidity and the effects of reforms on emerging market and developing economies are three areas where authorities need to remain vigilant
The report was submitted ahead of the G20 Summit which is scheduled to be held in Hamburg, Germany on 7th – 8th July 2017, and will be attended by Indian Prime Minister Narendra Modi and other G20 country leaders.
About Financial Stability Board:
The Financial Stability Board(FSB) is an international body that monitors and makes recommendations about the global financial system.
- It was established in April 2009.
- The Board of FSB includes representatives from all G20 major economies and the European Commission.
- Headquarters of FSB is located in Basel, Switzerland.