In its report, FSB has urged the G-20 nations as well as international community to expediate the financial reforms undertaken by them.
The agency also reviewed the commitments made by G20 Leaders at the Pittsburgh 2009 Summit that, by end-2012, all standardised OTC derivative contracts be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties (CCPs); that OTC derivative contracts be reported to trade repositories; and that non-centrally cleared contracts be subject to higher capital requirements.
Although, a lot of remarkable progress has been made for the implementaions of the standard practices, a lot remained to be complete by the end of 2012, FSB said.
The report stated that the countries including the EU, Japan and the US have quickly structured their legislative and regulatory frameworks and hopes to have regulatory frameworks in place by end-2012.
It said that standard setting bodies have made remarkable progress in developing the international policies which are key to advancing OTC derivatives reform across jurisdictions.
Highlighting the significance of cooperation among members, the watchdog said these frameworks should be comprehensive, consistent, and flexible to facilitate continued cooperation on issues.
In order to reduce systemic risk and the risk of regulatory arbitrage which could arise if there are significant gaps in implementation, full and consistent implementation by all FSB members is important.
