Financial Stability Committee: heavy task of achieving financial stability is still

G20 monitor the implementation plan more work needs to be done

* The importance of financial stability, the Committee will formulate rules for the regulation of the global SIFI

* Financial Stability Committee had deliberated for some time after the regulatory framework will be extended to SIFI non-banking sector


SEOUL, Nov. 12 Xinhua --- Group of 20 (G20) countries finance officials on Friday said that to ensure financial stability, regulatory issues in a lot of work to be done.

Financial Stability Board (FSB) Chairman Mario Draghi (Mario Draghi) sent a letter to leaders of G20, said the Committee has banks "too big to fail" framework for solution of this problem to reach a consensus, but it may take several years to complete. Drudge wrote in the letter, the Financial Stability Committee "has to address the importance of financial institutions and systems related to the risk of systemic and ethical policy framework, procedures and timetable to reach a consensus."

But the Financial Stability Committee added that the Committee would also like to extend this framework to non-banking companies, such as insurance companies.

The committee said, "With the accumulated experience, the Financial Stability Board will (of the framework) are reviewed to determine how to expand the scope of the framework to cover a larger systemic risk with financial institutions (SIFI), including financial market infrastructure, insurance companies, and other non-bank financial institutions. "

As "SIFI" set additional rules will be on the agenda of G20 summit supervision of the most difficult issues.

Two of the main sticking point is that, SIFI what is defined, and whether banks should be set to such additional capital requirements.

Financial Stability Committee has decided to push through focused global SIFI task, the commission said, as such "large, important market high and has a global network of" institutional crisis once, it will disrupt the global financial system, and will " In many countries the negative economic impact. "

The banks should be included in this area will be the Financial Stability Committee, national regulators, as well as other international regulatory organizations in the mid-2011 to reach a consensus.

Financial Stability and the Basel Committee on Banking Supervision said it will join the Committee to work out before the end of the additional rules for these banks to help these banks to improve the ability to absorb losses.

Financial Stability Committee, said, "according to national circumstances, from a range of possible options to improve the capacity of banks."

These programs may include additional capital requirements, and or a bond (contingent bond). Or bonds can be converted into stock under certain circumstances and the "bail bond (bail-in debt)".

However, the Financial Stability Committee also added that in some cases, it may now reduce global SIFI recognized the risk of other policy options.

"Financial Stability Committee approved further measures may include additional charges for liquidity, tightening restrictions on large-scale exposure."

In addition, the global SIFI country will have to make the risks faced by banks globally coordinated assessment and develop a cross-border resolution plan.

If SIFI face domestic institutions, these countries will need to set more stringent monitoring mechanism.

Turning to the broader reform agenda of G20, the Financial Stability Committee said that although the new Basel Capital Accord to further tighten the supervision of banks, but in other areas there is still much work to be done.