The EU and UK recently held their first meeting of the Joint EU-UK Financial Regulatory Forum in London. The meeting, co-chaired by representatives from HM Treasury and the European Commission, aimed to promote regulatory cooperation between the two parties. Participants from various financial institutions attended, including the Bank of England, the Financial Conduct Authority, and the European Central Bank. The Forum highlighted the importance of structured regulatory cooperation in preserving financial stability and protecting investors and consumers. Additionally, participants discussed topics such as financial stability risks, international regulatory standards, and efforts to combat money laundering and terrorist financing.
Despite the uncertain global economic outlook, both the EU and UK financial sectors remain resilient. Participants shared their views on market developments and financial stability, taking into account the current risk environment and economic trends. The UK provided updates on its financial services regulation reforms, including the implementation of the Smarter Regulatory Framework. The EU also shared its agenda for financial services until the end of the current legislature.
One of the key discussions during the meeting focused on addressing vulnerabilities in non-bank financial intermediation (NBFI). Participants emphasized the need to finalize and implement international reforms to enhance the resilience of the sector. They also discussed ongoing work by the Financial Stability Board (FSB) on money market funds and liquidity mismatches in open-ended funds. Both sides welcomed the FSB’s upcoming review of leverage in NBFI.
International cooperation and bilateral dialogue were highlighted as crucial for monitoring vulnerabilities and enhancing the resilience of the financial system. Participants expressed their support for the work being led by the FSB and the Basel Committee on Banking Supervision. They also provided updates on recent regulatory developments in areas such as banking, insurance, capital markets, digital finance, and sustainable finance.
In the banking sector, discussions revolved around the implementation of Basel III standards and the potential move to T+1 settlement for transactions. Both sides emphasized the importance of open and well-functioning capital markets to support growth in the UK and EU. On insurance, updates were shared regarding reforms to Solvency II and the importance of finalizing the Insurance Capital Standard for International Active Insurance Groups.
Digital finance was another topic of discussion, with updates on cryptoassets, stablecoins, and retail Central Bank Digital Currencies (CBDC). Participants highlighted the importance of implementing regulatory frameworks for these emerging technologies and expressed their interest in global implementation of the Financial Action Task Force’s Travel Rule for crypto-asset transfers.
Lastly, participants discussed sustainable finance and the transition to net zero. They emphasized the importance of multilateral efforts and participation in fora such as the G20 Sustainable Finance Working Group. Progress on taxonomy implementation and sustainability disclosure requirements was also noted, with support for the work of the International Sustainability Standards Board.
The next meeting of the Joint EU-UK Financial Regulatory Forum is scheduled to take place in Brussels in spring 2024. Both the EU and UK are committed to following up on the topics discussed and furthering their regulatory cooperation.
+ There are no comments
Add yours