Speech by Mr Fernando Restoy*, Chairman, Financial Stability Institute, Bank for International Settlements, about building a resilient UK financial sector – next steps for prudential regulation, structural reform and mitigating risks: ‘I think that there is a general sense that the post-crisis regulatory reforms have already made substantial progress in meeting their objectives. While it would be a mistake to claim “mission accomplished”, the time has certainly come to shift the emphasis from standard setting to ensuring an effective implementation of the agreed reforms.’
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The euro area’s economy continues on a growth path and inflation is gradually returning towards our objective, says Mario Draghy, President of the European Central Bank, during his speech. “But uncertainty permeates the economic outlook. Recent data releases have created questions about the durability of the growth outlook. And – as we will discuss over the next two days – the crisis has presented us with new issues and fresh challenges in understanding the wage- and price-setting process.”
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The Bank of England, Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have published a joint discussion paper (DP) on an approach to improve the operational resilience of firms and financial market infrastructures (FMI’s). It envisages that boards and senior management can achieve better standards of operational resilience through increased focus on setting, monitoring and testing specific impact tolerances for key business services, which define the amount of disruption that could be tolerated.
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We present a euro area central stabilisation scheme that is relatively free from adverse incentives (moral hazard), because transfer payments to Member States are based on changes in world trade in the various economic sectors. Indeed, these changes are largely driven by external forces and therefore not directly controlled by individual governments or countries. The transfers generated by our scheme tend to be temporary, countercyclical and larger when economies are less diversified. Finally, the scheme is quite robust to revisions in the underlying export data.

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The European Banking Authority (EBA) issued a Recommendation addressed to the Maltese Financial Intelligence Analysis Unit (FIAU) after establishing it had breached Union law in relation to its supervision of Pilatus Bank. The EBA Recommendation aims at remedying the particular failings identified by the EBA by encouraging the FIAU to take all the necessary actions to comply with the Anti-Money Laundering and Countering Terrorism Financing Directive (AML/CTF). Continue reading…

The Bank of England, Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have published a joint discussion paper (DP) on an approach to improve the operational resilience of firms and financial market infrastructures (FMI’s). It envisages that boards and senior management can achieve better standards of operational resilience through increased focus on setting, monitoring and testing specific impact tolerances for key business services, which define the amount of disruption that could be tolerated.
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The changing business and risk landscape, the implications of the fourth industrial revolution for members and how Airmic can help them flourish in the new environment formed the backbone annual conference. More than 1,800 people attended the event including nearly 500 members. The conference saw the unveiling of more than ten reports and papers, ranging from cyber-governance to parametric insurance to an analysis of the impact of the Insurance Act.
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