November 29, 2010
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Transcript of November 29, 2010
November 29, 2010November 29, 2010
G20 G20 & Post-Summit Agenda for Sustained & Post-Summit Agenda for Sustained
Regulatory ReformRegulatory Reform
Senior Deputy Governor Senior Deputy Governor Financial Supervisory ServiceFinancial Supervisory Service
Dr. Lee Jang YungDr. Lee Jang Yung
OverviewOverview
G20 Seoul Summit: Significance & AchievementsG20 Seoul Summit: Significance & Achievements
Key Agreements at Seoul SummitKey Agreements at Seoul Summit
Post-Summit Agenda for Sustained ReformPost-Summit Agenda for Sustained Reform
G20 Seoul Summit: G20 Seoul Summit: Significance & AchievementsSignificance & Achievements
G20 Seoul Summit: Significance & G20 Seoul Summit: Significance & AchievementsAchievements
G20 Summit: Top Global Forum for Economic Cooperation
• December, 1999: Agreement among G7, 12 emerging market countries, and the EU
• November 15, 2008: Washington Summit on the global financial crisis
• Five Summit Meetings
- November 2008: Washington, DC- April 2009: London- September 2009: Pittsburgh- June 2010: Toronto- November 2010: Seoul
Key Agreements at Seoul Key Agreements at Seoul Summit Summit
Key Agreements at Seoul Key Agreements at Seoul SummitSummit
Agenda & Accomplishments
Summit Agenda
Agreements • Basel III • SIFI regulation• Macroeconomic policies• Reform of IMF governance
New Proposals
• Global financial safety net• Development
Future Agenda
• Macroprudential supervision• Regulatory reform from emerging market perspectives• Regulation on shadow banking• Consumer protection
CapitalCapital
Basel III
Liquidity
Leverage
Liquidity coverage ratio:
Net stable funding ratio:
▪ Leverage:
▪ Common equity ratio: 2.0% → 4.5%
▪ Capital conservation buffer: 2.5%
▪ Counter-cyclical capital buffer: 0.0% → 2.5%
Tier 1 capital
Nominal exposure≥ 3%
H.Q. liquid assets
30-day net cash outflow≥ 100%
Available S.F.Required S.F. ≥ 100%
Key Agreements at Seoul Key Agreements at Seoul SummitSummit
Basel III
Key Agreements at Seoul Key Agreements at Seoul SummitSummit
SIFI Regulation
• Loss-absorbency capacity
• Resolution framework
• More intense supervisory oversight
• Robust core financial market infrastructures
Post-Summit Agenda for Sustained Post-Summit Agenda for Sustained ReformReform
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Post-Summit Agenda for Sustained ReformPost-Summit Agenda for Sustained Reform
Implementation and Oversight
• Legal and regulatory harmony across countries & compliance
• Compliance and adaption of financial firms to new environment
Safety and Balance between Real & Financial Sectors
• Sustaining regulatory reform while promoting growth
• Korea committed to Basel III with minimal market disruption
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Respect for Market InnovationRespect for Market Innovation
Innovation
• Efficient allocation of financial market resources
• Lower transaction cost
Optimal Regulatory FrameworksOptimal Regulatory Frameworks
• Stepped-up oversight of high risk areas (e.g., OTC derivatives)
• Support for productive real economic activities
• Fine-tuning of regulations
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Post-Summit Agenda for Sustained ReformPost-Summit Agenda for Sustained Reform
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G20 Seoul SummitG20 Seoul Summit
Emerging Market Economies
• Participation of five non-G20 members as invited countries
• Emerging market economies’ agenda in the G20 discussion - Global financial safety net - Development
Future Summit MeetingsFuture Summit Meetings
• Discussion on emerging market issues at the FSB, IMF, WB - Foreign exchange risks - Local regulation and supervision of internationally active financial institutions
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Post-Summit Agenda for Sustained ReformPost-Summit Agenda for Sustained Reform
Financial Regulation Reform AheadFinancial Regulation Reform Ahead
Balance between Advanced & Emerging Countries
Balance between Advanced & Emerging Countries
GlobalRegulatory Reform
GlobalRegulatory Reform
Asia as Growth EngineAsia as Growth Engine
Return to Global EconomicGrowth
Return to Global EconomicGrowth
ReformMomentum
Shared Growth beyond CrisisShared Growth beyond CrisisShared Growth beyond CrisisShared Growth beyond Crisis
THANK YOU