Xinhua, London :
Chairman of the Financial Stability Board (FSB) Mark Carney Friday issued a plea to G20 finance ministers and central bank governors to back reforms aimed to safeguard the future of the global financial system.
Carney, who is also governor of the Bank of England, called on finance ministers and governors in an open letter to support moves to end the problem of too-big-to-fail institutions.
In addition Carney asked for support to transform shadow banking to transparent and resilient market-based financing, and to make derivatives markets safer.
Carney outlined proposals for a Gone-concern Loss-absorbing Capacity (GLAC) for systemically important banks which could be used to resolve banks without using public funds and without compromising different nations’ resolution regimes.
Carney called for decisions on details of how much GLAC should be held by banks, and what GLAC should be made up of.
The deadline the FSB is working towards is the G20 Nations Brisbane Summit in November, where recommendations will be considered.
Carney also recommended that the resolution of cross-border banks should be supported by contractual or statutory approaches for cross-border recognition of resolution actions, and for national authorities to be empowered to co-operate fully with their counterparts abroad.
