Joint Forum

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Contents

Overview

The Joint Forum was established in 1996 under the aegis of the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS) to deal with issues common to the banking, securities and insurance sectors, including the regulation of financial conglomerates. The Joint Forum is comprised of an equal number of senior bank, insurance and securities supervisors representing each supervisory constituency.

Chairman:

Current: Mr Tony D'Aloisio, Chairman of the Australian Securities and Investments Commission (ASIC)

Previous:

  • John C Dugan, Comptroller of the Currency, United States (2007-2009)
  • Dirk Witteveen, de Nederlandsche Bank (2006-September 2007)
  • Ian Johnston, Hong Kong Securities and Futures Commission (June-December 2005)
  • Gay Huey Evans, UK Financial Services Authority (2004-June 2005)
  • José María Roldán, Bank of Spain (2002-2003)
  • Jarl Symreng, Finansinspektionen - Sweden (2000-2001)
  • Alan Cameron, Australian Securities and Investments Commission (1998-1999)
  • Tom de Swaan, de Nederlandsche Bank (1996-1997)

Frequency of meetings: The Joint Forum usually meets three times per year.

Main subgroups

  • Risk Assessment and Capital
  • Conglomerate Supervision
  • Customer Suitability

2010 Report on "supervisory gaps"

This report analyses key issues arising from the differentiated nature of financial regulation in the international banking, insurance, and securities sectors. It also addresses gaps arising from the scope of financial regulation as it relates to different financial activities, with a particular focus on certain unregulated or lightly regulated entities or activities. The Joint Forum prepared this report at the request of the G-20 to help identify potential areas where systemic risks may not be fully captured in the current regulatory framework and to make recommendations on needed improvements to strengthen regulation of the financial system.

The Joint Forum presents its findings and recommendations in five key issue areas:

  • Issues arising from regulatory differences across the three sectors, including with respect to similar financial products;
  • Supervision and regulation of financial groups, focusing on unregulated entities within those groups;
  • Residential mortgage origination, focusing on minimum underwriting standards consistently implemented by different types of mortgage providers;
  • Hedge funds, especially those that present systemic risk; and
  • Credit risk transfer, focusing on credit default swaps and financial guarantee insurance.


A forum of global financial regulators put forward 17 recommendations on Friday covering supervision of hedge funds, credit derivatives and mortgages in a bid to plug supervisory gaps highlighted by the financial crisis.

The G20 group of countries, which is spearheading reform of financial regulation at the global level, asked the forum last November to come up with recommendations.

Policymakers saw flaws in how supervisors of securities, insurers and banks worked together, with some firms able to exploit gaps. The recommendations comprise a marked shift in the parameters of regulation and supervision.

Some of the recommendations are already being acted on, such as forcing hedge fund managers to register and report to supervisors, and increasing transparency and central clearing of credit derivatives.

For report from the Basel Committee on Banking Supervision, the International Organisation of Securities Commissions and the International Association of Insurance Supervisors click here

The main recommendations are:

– There should be minimum capital rules for all financial sectors so that firms can’t avoid setting aside capital by shifting an activity to a differently supervised sector.

– Firms that offer mortgages should adopt minimum underwriting standards to accurately assess each borrower’s ability to repay the loan in a reasonable period of time. There should be effective verification of income, job and debts. The origins of the financial crisis lay in defaults in the U.S. subprime home loans market.

– Supervisors should introduce/or strengthen minimum risk management regulatory standards for hedge fund operators.

– Supervisors should impose reporting requirements on hedge fund operators to identify possible sources of systemic risk.

– There should be minimum and ongoing capital requirements on hedge fund operators as a condition for registration and to allow orderly liquidation.

– Supervisors should encourage or require greater transparency for credit default swaps and financial guarantee insurance.

– Supervisors should impose capital requirements on CDS transactions, where appropriate.

– Policymakers should clarify the position of financial guarantee insurance in insurance regulation to make clear the sector is subject to regulation and supervision.

– Regulators should revise their core principles to specifically take into account system wide risks and not just risks from an individual firm. Poor appreciation and tackling of destabilising systemic risks is seen as a core lesson from the credit crunch.

– There should be similar rules for similar activities, no matter which financial sector they are located in.

– All activities and risks within cross-border financial groups should be regulated and supervised. The aim is to ensure that hitherto unregulated activities within a group are also supervised.

New Chairman of the Joint Forum

Source: New Chairman of the Joint Forum Joint Forum, 8 January 2010

The Joint Forum 's parent organisations, the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO), and the International Association of Insurance Supervisors (IAIS), have announced the appointment of Mr Tony D'Aloisio as Chairman of the Joint Forum. This two-year appointment is effective 1 January 2010.

Mr D'Aloisio, who succeeds John Dugan of the Office of the Comptroller of the Currency (United States) in this role, is the Chairman of the Australian Securities and Investments Commission (ASIC).

The Joint Forum's parent organisations expressed their gratitude to Mr Dugan for his leadership during his time as Chairman and recognised the significant contributions made during his tenure.

Tony D'Aloisio cited the Joint Forum as an excellent example of supervisory cooperation to address cross-sectoral issues and areas of common risk: "I am honoured to have been appointed to this important position in international financial regulation and look forward to continuing to build on the cooperation across the banking, insurance and securities sectors."

The Joint Forum was established in 1996 under the aegis of the Basel Committee on Banking Supervision, IOSCO, and the IAIS to deal with issues common to the banking, securities and insurance sectors, including the supervision of financial conglomerates.

Joint Forum publications


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