The International Regulatory Strategy Group (IRSG) has set out its key areas of focus in financial services for the UK’s presidency of the G7 this year. The recovery from the COVID-19 pandemic, climate change and digital agenda will all be central to the UK’s presidency.
The IRSG recognises the importance of the UK of demonstrating global
leadership on these vital issues by fostering international cooperation.
With this in mind, the IRSG has developed a financial services roadmap
for UK’s G7 presidency, to ensure that it tackles the most pressing
challenges for the global economy. It advocates four areas of focus for
the UK: global regulatory coherence for pandemic recovery; leadership on
climate agenda ahead of COP26; digital policy continuity, including on
digital taxation; and alignment with G20 global policy priorities.
1. Global regulatory coherence for pandemic recovery
As world economies shift gear towards pandemic recovery, it will be important for the UK and its G7 partners to work together to support global recovery. To that end, joint coordinated action and global regulatory coherence is needed to minimise potential future fragmentation and protectionist policies in the wake of the pandemic. The pandemic underlines the importance, now more than ever, of promoting regulatory coherence. It is important that the pandemic recovery is a sustainable, equitable and citizen-centric recovery. Suggestions for action include:
- Share best practice on recapitalisation of the corporate sector to promote recovery
- Challenge policy and regulatory localisation on capital, liquidity, total-loss absorbing capacity (TLAC), data, and operational resilience
- Address fragmentation challenges by calling for a resolution of Basel III timetables and
- Undertake a stock take of bank branch and subsidiary requirements
Regulatory fragmentation remains a significant challenge, particularly regarding a preference for localised capital, liquidity, TLAC, derivatives, market structure, infrastructure, data, and operational resilience. To that end, we welcome international cooperation with the Financial Stability Board (FSB), the International Organization of Securities Commission (IOSCO), the International Association of Insurance Supervisors (IAIS), the Basel Committee on Covid-19 financial regulatory responses. Finally, we welcome the extended Basel III implementation deadline to 1 January 2023 but have concern around risks of inconsistent implementation.
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