Joint Forum review of financial regulation
Jan 14, 2010
The Joint Forum of financial supervisors has published Review of the Differentiated Nature and Scope of Financial Regulation: Key Issues and Recommendations.
|Annex 2 of the report (Fundamental Analysis of the Objectives of Financial Regulation) states: The objective of customer or stakeholder protection is not equivalent to the objective to reduce systemic risks. On the one hand, protecting customers may help to reduce systemic risk by for instance preserving market liquidity, while on the other this might increase systemic risks by undermining market discipline. To have financial supervisors put more emphasis on the objective of systemic risk reduction, the G-20 recommends in its 2009 report on Sound Regulation and Strengthening Transparency that 'as a supplement to their core mandate, the mandates of all national financial regulators, central banks, and oversight authorities, and of all international financial bodies and standard setters (IASB, BCBS, IAIS and IOSCO) should take account of financial system stability'.|
The Joint Forum is a consortium of the Basel Committee on Banking Supervision, the International Organization of Securities Commissions, and the International Association of Insurance Supervisors that addresses issues common to the banking, securities, and insurance sectors, including the supervision of financial conglomerates. Click to Download the Joint Forum Report and Recommendations (PDF 986k).