Int'l financial bodies finalizing reform measures for G20 Summit

16:46, October 19, 2010      

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Global financial regulatory committees are ready to reach a substantial agreement on financial sector reform at meetings to be held in the South Korea's capital, local media reported Tuesday.

The Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB), which plan to hold plenary meetings in Seoul on Tuesday and Wednesday respectively, will finalize proposals on financial sector reform that will be submitted to the upcoming G20 Seoul Summit, media here said.

At the BCBS meeting, officials will discuss new capital and liquidity standards in order to enhance microprudential supervision of individual lenders, while exploring ways to tighten regulation on systematically important financial institutes (SIFIs) .

The Seoul BCBS meeting, however, will be mostly based on Basel III, agreed in September, media reports said.

Basel III lays its foundation on substantial strengthening of existing capital requirements, by increasing the minimum common equity requirement to a total of 7 percent from the current level of 2.5 percent, while creating a capital conservation buffer to use in the face of financial crises.

The FSB Plenary Meeting, on the other hand, will deal with measures to minimize moral hazard problems in SIFIs, and discuss ways to boost regulation on bank capital and liquidity.

Over-the-counter (OTC) financial market reform and outreach programs will also be tabled at the FSB meeting.

Results from both of the meetings will be sent to the upcoming G20 Finance Ministers and Central Bank Governors Meeting in Gyeongju, a coastal city in the far southeastern corner of North Gyeongsang province in South Korea, where the issues will be discussed in the Section for Financial Regulatory Reform, and then to the Seoul Summit.

Source: Xinhua


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