In November 2010, the Financial Stability Board (FSB) announced arrangements to expand and formalise outreach beyond its membership. To this end, six regional consultative groups1 were established to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.
Today, the Central Bank of the United Arab Emirates hosted the inaugural meeting of the FSB Regional Consultative Group for the Middle East and North Africa in Abu Dhabi. Members discussed the FSB’s work plan and policy priorities, major financial regulatory reforms and their impacts, and vulnerabilities and regional financial stability issues. Discussions on regulatory reforms and their impacts centred around the Basel III capital and liquidity standards, and the host-country perspective on the supervision of Globally Systemically Important Financial Institutions (G-SIFIs). Under the vulnerabilities and regional financial stability issues, members discussed the impact of the sovereign debt crisis, in particular, linkages between sovereign debt and financial sector balance sheets and uncertainty in bank funding. The development of domestic capital markets was the second area of discussion under this heading.
The FSB Regional Consultative Group for the Middle East and North Africa is co-chaired by Fahad Al-Mubarak, Governor, Saudi Arabian Monetary Agency and Salem Al-Sabah, Governor, Central Bank of Kuwait. The current membership includes financial authorities from Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates; other jurisdictions in the region are welcome to join the Regional Consultative Group over time.
Background
The FSB Charter stipulates that the FSB “will consult widely amongst its Members and with other stakeholders including private sector and non-member authorities. The consultation process will include regional outreach activities to broaden the circle of countries engaged in the work to promote international financial stability”.2 At the Toronto Summit in June 2010, the G20 Leaders endorsed such a process by calling on the FSB “to expand upon and formalize its outreach activities beyond the membership of the G-20 to reflect the global nature of our financial system”.3
The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. Through the six regional groups, the FSB will be able to develop global financial policy initiatives in a more inclusive process.
The FSB is chaired by Mark Carney, Governor of the Bank of Canada. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.
1 Regional consultative groups were established for the following regions: the Americas, Asia, the Commonwealth of Independent States, Europe, the Middle East and North Africa, and Sub-Saharan Africa.
2 http://www.financialstabilityboard.org/publications/r_090925d.pdf