In their final communique from their recent meeting, the G-20 Finance Ministers noted the continued progress in implementing OTC derivatives reforms, but said that work remains to ensure greater consistency in cross-border regulatory standards. The Finance Ministers, including U.S. Treasury Secretary Jacob Lew, are committed to rapidly completing the remaining legislative frameworks and regulations for these reforms. In particular, the Ministers praised the recent European Commission-CFTC. Agreement on cross-border issues related to OTC derivatives reforms as a major constructive step forward, which paves the way for resolving remaining conflicts, inconsistencies, gaps and duplicative requirements globally. Further steps remain needed, and the Finance Ministers have asked key regulators to report by the September Summit of the G-20 Leaders on how they have resolved these cross-border issues. In this context, the Finance Ministers agree that jurisdictions and regulators should be able to defer to each other when it is justified by the quality of their respective regulations and enforcement regimes, based on essentially identically outcomes, in a non-discriminatory way, paying due respect to home country regulation regimes. This position essentially endorses the CFTC’s substituted compliance regime and the E.U.’s equivalence regime.
The G-20 also look forward to further Financial Stability Board policy recommendations for the oversight and regulation of the shadow banking system by the Leaders’ Summit and will work towards their timely implementation. They also reiterated their call on the IASB and FASB to finalize by the end of 2013 their work on key outstanding projects for achieving convergence on a single set of high-quality accounting standards.
The Finance Ministers also look forward to the FSB progress report on both national authorities’ and standard setting bodies’ steps to reduce reliance on credit rating agencies ratings for the St PetersburgG-20 Leaders Summit. They welcome the completion of IOSCO’s Principles for Financial Benchmarks and the establishment of the FSB’s Official Sector Steering Group to coordinate work on the necessary reforms of interest rate benchmarks and guide the work of a Market Participants Group.