G20 leaders today endorsed a range of measures designed to make the global economy more resilient to future shocks and to protect business and consumer interests.
Australia has focused on four areas to ensure the circumstances that led to the 2008 global financial crisis will never be repeated:
- strengthen financial institutions;
- protect taxpayers from having to fund bailouts if ‘too big to fail’ financial institutions run into difficulty;
- address shadow banking risks; and
- make derivative markets safer.
The G20 Leaders’ Summit has delivered on this commitment.
These important reforms mean the global financial system is far more resilient than it was at the time of the crisis.
Banks have more and higher quality capital, derivatives markets are more transparent and we have reduced risks in the shadow banking sector.
We have also agreed to a proposal to protect taxpayers should a large global bank fail.
This proposal will be subject to public consultation, including with business in 2015.
While work remains to finalise some elements of our policy framework, the G20 financial regulation agenda will now shift focus to implementation, supervision and monitoring of the effects of the reforms. We will also remain alert to emerging risks.
Beginning in 2015, the Financial Stability Board’s (FSB) new reporting arrangements on the implementation and effects of the reforms will support this shift in focus.
I would like to thank the FSB for its work this year. I welcome Governor Carney’s reappointment as Chairman of the FSB for a further three year term.
His leadership has been invaluable in progressing this important agenda.
16 November 2014