February 10, 2019 / 11:17 AM / 12 days ago

Financial Stability Board must identify new threats, refine existing rules: chair

FILE PHOTO: Federal Reserve Vice Chairman for Supervision Randal Quarles addresses the Economic Club of New York in New York City, U.S., October 18, 2018. REUTERS/Brendan McDermid/File Photo

WASHINGTON (Reuters) - The Financial Stability Board needs to commit more resources to identifying new threats while reviewing existing reforms for refinement, its chair said Sunday.

Randal Quarles, who took over as chair of the FSB in November and is the U.S. Federal Reserve’s vice chair for supervision, aims to chart a new course for the international regulatory body.

In particular, he said the body must retrain its focus on seeking out unknown market threats, and also called for regulators to revisit existing reforms to see if they could be streamlined.

“It is time for the FSB to turn more of its energy and attention to the future,” he said in Hong Kong, according to prepared remarks.

In particular, Quarles said the FSB would be reviewing its framework for assessing vulnerabilities to ensure it can identify new and developing market threats. He also said the FSB was evaluating existing reforms for their effectiveness, and seeking ways to make them more efficient.

Quarles was appointed to the Fed by President Donald Trump in 2017, and has sought to streamline U.S. rules without substantially weakening them. He made a similar case for the FSB’s efforts.

“If reforms are unnecessarily burdensome and we can achieve strong resiliency more efficiently and simply, we should be able to boost sustainable financial and economic activity, thus benefiting everyone,” he said.

He also called on the FSB to up its outreach and transparency with all affected parties, including the financial industry, to ensure all perspectives are considered.

“The FSB must maintain its legitimacy in order to be effective, and to do that we have to work hard to hear from all relevant parties when deliberating,” he said.

Reporting by Pete Schroeder; Editing by Robert Birsel

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