Many jurisdictions around the world are now finalizing implementation of the post crisis regulatory reforms agreed to by the G20 nations. The IBFed notes its concern that there are a growing number of instances where jurisdictions are introducing variations of the agreed reforms intended to protect their own jurisdiction, for example by ring-fencing. Such variations are drivers of market fragmentation, undermine the international cooperation of the last decade and inhibit the full, timely and consistent implementation of the post-crisis international agreements reached by G20 standard setting bodies.

We support the FSB’s drafting of a report on market fragmentation which will be delivered to G20 this June. The report could be influential in promoting the balance between the flexibility required by an internationally open economy, based on a multilaterally agreed supervisory framework, and the more prescriptive national requirements defined by each domestic authority, which, in our view, ultimately have the effect of reducing the sound allocation of capital and liquidity between the various jurisdictions.

IBFed Letter to FSB on ring-fencing_17 May 2019