Release Date: 23 April 2010
SIFMA/ASIFMA-Andrew DeSouza, +1 (202) 962-7390, firstname.lastname@example.org
AFME-Rob McIvor, +44 (0)22 7743 9312, email@example.com
GFMA Urges G20 Finance Ministers to Assess Impact of Global Reforms on Economic Growth, Job Creation
23 April 2010 -- The Global Financial Markets Association (GFMA) issued the following statement today on global financial regulatory reform ahead of the 23 April meeting of G20 Finance Ministers:
"Collectively, legislators and the financial services industry have made tremendous progress towards building a more robust financial system. Now, the G20 must take stock of the work that has been done and carefully consider which proposed measures will support that aim or which are more likely to have a negative impact on both the financial system and the hundreds of millions of people and businesses that it serves," said Chief Executive Officer, Tim Ryan.
"Specifically, we are concerned over possible hasty implementation of the Basel capital proposals which would reduce the ability of the industry to provide capital to businesses and consumers to support economic growth. Finalizing the proposed revisions to the Basel Accord by the end of this year will not give enough time to assess their wider economic consequences and make necessary changes. We are also concerned at proposals to levy punitive taxes on the industry that will further reduce available capital while bringing little or no benefit to financial stability," adds Ryan.
GFMA also applauds the G20 finance ministers for their work to support the regulatory and legislative reforms necessary to ensure a robust global financial system. It urges them to assess the aggregate impact on global economic growth of the numerous, frequently overlapping, initiatives being proposed before committing to implementation. While individually each initiative may have merit - and the GFMA supports many of the reforms - it is also vital to check that, taken together, these reforms do not negatively impact investors, capital flows, economic growth, or job creation during a period of global economic vulnerability or in the longer term.
In addition, as countries accelerate the pace of regulatory and legislative reforms and encourage renewed, sustainable growth, it remains vital to seek a well-balanced and well-coordinated regulatory framework and guard against the potential for barriers to market entry, distortions to competition, or regulatory arbitrage. GFMA believes that the FSB's Standing Committee for Standards Implementation - which is tasked with planning peer reviews of its members, and is to report on members' commitments and progress in implementing international financial standards and other initiatives - is well situated to monitor developments in these areas and to ensure coordination and cooperation among regulators.
Finally, the FSB's expanded mandate and central role in promoting a better understanding of regulatory standards in international markets and facilitating the coordination of standards across different jurisdictions, means that the FSB will have a more direct impact on market participants. In this regard, GFMA welcomes the commitment to consultation in the FSB's Charter. It is critical that the FSB provide, as part of the coordination procedures, for a thorough consultation with market participants on policy development, ensuring reasonable time for comment and discussion, and to advance proposals that are well informed by impact analysis. GFMA stands committed to contributing to the FBS's consultation process across the globe.
GFMA joins together the common interests of hundreds of financial institutions across the globe. GFMA's mission is to develop policies and strategies for global policy issues in the financial markets, thereby promoting coordinated advocacy efforts across its partner associations. GFMA is partnered with the Association for Financial Markets in Europe (AFME), the Asian Securities and Financial Markets Association (ASIFMA), and, in the United States, the Securities Industry and Financial Markets Association (SIFMA).