Financial Stability Board Examines Market Fragmentation Issues

In a new report, the Financial Stability Board ("FSB") considered "financial activities where supervisory practices and regulatory policies may give rise to market fragmentation." The FSB highlighted:

• national regulatory actions concerning the trading and clearing of OTC derivatives, in which regulators did not consistently adopt G20 international standards;
• banks' cross-border management of capital and liquidity, in which regulators did not consistently adopt G20 international standards and implemented duplicative regulations; and
• barriers to sharing information across borders, including (i) differences in trade reporting requirements, (ii) legal barriers to full data reporting or sharing, and (iii) differences in reporting requirements concerning cyber risk and stress testing.