Systemic Risks Highlighted by Joint Forum
Key issues arising from the differentiated nature of financial regulation in the international banking, securities, and insurance sectors have been highlighted by The Joint Forum. The Forum released the findings in a new report, Review of the Differentiated Nature and Scope of Financial Regulation – Key Issues and Recommendations.
This review was requested by the G20 through the Financial Stability Board. It also addresses gaps arising from the scope of regulation as it relates to different financial activities, with a particular focus on certain unregulated or lightly regulated entities or activities. The objectives of the review were to identify potential areas where systemic risks may not be fully captured in the current regulatory framework and to make recommendations on needed improvements to strengthen regulation of the financial system.
John C Dugan, chair of the Joint Forum until the end of 2009 and Comptroller of the Currency in the United States, said: “Consistency in regulation and similar supervision for similar activities are key principles for effective oversight of systemic risks. This report sets the stage for additional important work that will lead to greater convergence of the supervision of financial activities and firms.”
Meanwhile, the Joint Forum’s parent organisations, the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO), and the International Association of Insurance Supervisors (IAIS), have announced the appointment of Tony D’Aloisio as chairman of the Joint Forum. This two-year appointment became effective 1 January 2010.
D’Aloisio is the chairman of the Australian Securities and Investments Commission (ASIC).