GFMA Welcomes Financial Reforms Outlined by G20 Communiqué
The Global Financial Markets Association (GFMA) says that it broadly supports the financial sector reforms outlined in the communiqué issued Tuesday 19 June by the Group of 20 industrialised and developing countries (G20) at the summit at Los Cabos, Mexico.
“We welcome the G20’s continuing focus on reforming the financial sector, which has already led to significant regulatory change, including robust capital and liquidity requirements for banks and a framework for an international resolution regime,” said Simon Lewis, chief executive officer (CEO) of the GFMA, a body which brings together three financial trade associations: the Association for Financial Markets in Europe (AFME), the Asia Securities Industry and Financial Markets Association (ASIFMA) and the Securities Industry and Financial Markets Association (SIFMA).
“We also welcome the commitment of the G20 leaders to maintaining a consistent and coherent global approach, which is becoming ever more important as leading countries and regions create an increasingly complex regulatory environment,” added Lewis. “As G20 ministers continue to implement the reforms necessary to ensure a robust global financial system, we would urge them to thoroughly assess the impact on economic growth of the numerous initiatives underway in several jurisdictions.”
The GFMA additionally commented on specific areas of financial reform, including:
Legal Entity Identifiers (LEIs):
“The Financial Stability Board [FSB] should be commended for recognising the need for a strong central control process to ensure integrity of information in the LEI database. GFMA fully supports the establishment of a global LEI system, which could dramatically improve systemic risk management in the global financial industry. However, if the implementation group is to comprise only of regulators, then GFMA would like to see active interaction with industry experts to ensure the system is set up in a timely and effective way. GFMA supports the FSB call to launch the LEI system by the end of this year and to be independently operational by March 2013.”
Strengthening the FSB:
“GFMA strongly supports reinforcing the role of the FSB, which will allow it to play an enhanced role in co-ordinating and harmonising global financial regulation. Given the FSB’s enhanced role, we appreciate their recognition that there needs to be increased consultation and transparency with the private sector. This is particularly important as the growing complexity of international financial regulation could impact not only market participants, but also regulators and supervisors.”
Capital Requirements:
“GFMA supports the strengthening of capital and liquidity requirements under the Basel III accord, and calls on the FSB to ensure the new framework is rolled out in a measured and consistent way around the globe, with consideration given to the delicate balance between maintaining robust capital requirements and the ability of banks to support economic growth.”