Monday, April 27, 2009

Turner and Compliance

It will be different in the future though, and there are some firm dates such as June 2009 when the new collegiate of supervisory boards that comprise the Financial Stability Board start their work.

The Financial Stability Board (FSB) itself is there as an early warning system rather than as an actual decision-maker. In fact, it has no decision making powers and so each national and regional regulator can make their own choices. This means that there is no global regulator and there is unlikely to be one.

Equally, there is unlikely to be a regional regulator for Europe, which is why the De Larosière Group recommended strengthening CEBS, CESR and CIOPS but not to make them the EU regulatory power. That power still lies with the FSA, AMF, BAFIN and other national regulators.

So the FSB is the alarm bell and standard setting organisation between nations and regions, but not a powerbase.

The real meat of the G20 pronouncements however had more to do with liquidity – a word that had not appeared on any risk radars or regulatory agendas just two years ago – and capital adequacy. As a result Basel II will be amended to address pro-cyclicality through minimum levels of capital although, as this short clip illustrates,



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