Release Date: 17 April 2013

Contact:  James White, +44 (0)20 7743 9367, 
                Andrew DeSouza, +1 202 962 7390,

GFMA Comments on the G20 Summit  

London, 17 April 2013 — The Global Financial Markets Association (GFMA) today released the following statement from Simon Lewis, chief executive, in advance of the G20 Finance Ministers and Central Bank Governors’ Meeting.

“We welcome the G20’s efforts to strengthen financial regulation and their commitment to the full, timely and consistent implementation of the internationally agreed financial sector reforms. We commend the progress that has been made since 2009, including the development of a global resolution framework, the creation of a global legal entity identifier (LEI) system, and enhanced prudential oversight.”

Additional GFMA commentary on specific areas of financial reform:

“GFMA supports the commitment of G20 Finance Ministers and Central Bank Governors to encourage all jurisdictions to continue working together to ensure national regulatory frameworks avoid cross-border conflicts, inconsistencies, gaps and duplicative requirements. We urge G20 Finance Ministers and Central Bank Governors to work together to ensure consistency across all jurisdictions. Consistent implementation is necessary to ensure a level playing field and to minimize the risk of regulatory arbitrage.”

Cross Border Resolution
“GFMA continues to support the G20, and the FSB’s efforts to ensure all relevant jurisdictions have the capacity to resolve systemically important financial institutions (G-SIFIs) without systemic disruption and without exposing the taxpayer to the risk of loss, within a reasonable timeframe. An effective and credible resolution regime for G-SIFIs is indeed a critical component of the policy framework for ending “too big to fail”. GFMA believes that cooperation between home and host regulators in planning, coordinating and implementing a resolution strategy is key to success.”

Cross Border Swaps Regulation
“It is imperative that individual jurisdictions coordinate their cross-border swap regulation with other regulatory agencies at home and abroad. Without a unified approach among these various regimes, compliance with any one of the multiple and possibly duplicative sets of standards may be compromised.”

Financial Transaction Tax
“GFMA remains strongly opposed to a financial transaction tax (FTT). The FTT would have unprecedented extraterritorial impacts, contrary to G20 principles, and, as even the European Commission estimates, will harm economic growth at a time of significant economic uncertainty. Global markets remain fragile, with many economies experiencing historic levels of unemployment and unusually slow recoveries. Now is not the time to experiment with policies that will fragment markets, increase market volatility, harm savings, and impede growth. While every state has the right to impose taxes in its territory, this tax would apply extraterritorially to a vast number of transactions and parties outside of the participating countries, creating harmful spillover effects on the global economy. As such, we respectfully urge the G20 finance ministers to oppose the proposed EU FTT.”

Financial Benchmarks
“GFMA strongly supports the efforts of the FSB to act as a coordinator to ensure that information and knowledge are shared among authorities. GFMA particularly welcomes the efforts of IOSCO and BIS in this arena. Reform is needed and should be focused on sound practices, harmonized internationally, and commensurate with the significance of the benchmark in the marketplace.”

Implementation of Basel III
“GFMA strongly believes that Basel III should be implemented and applied consistently in all major jurisdictions. We also support the ongoing efforts of the Basel Committee to assess the consistency of each member jurisdiction’s domestic regulations with the capital standards established by the Basel Committee. The inconsistent implementation of Basel III could increase the risk of regulatory arbitrage and thereby undermine the effectiveness of global bank capital standards.”

Legal Entity Identifiers (LEIs)
“GFMA continues to be supportive of the ongoing development of a global LEI system, and supports the recent establishment of the Regulatory Oversight Committee (ROC) and the Committee on Evaluation and Standards (CES). We look forward to near term guidance from these bodies on the integration of pre-LOUs (Local Operating Units) and LOUs into the Global LEI System. We also look forward to continuing to work with the ROC and CES through the Private Sector Participatory Group (PSPG) Forum.”

Revisions to Securitisation Capital Framework
“GFMA recognises and supports the Basel Committee’s goals in framing the proposals to make securitisation capital requirements more prudent and risk-sensitive, mitigate mechanistic reliance on external credit ratings, and reduce cliff effects. However we are concerned that in a number of ways the proposals fall short or fail to achieve these goals, and threaten the viability of many types of economically beneficial securitization activity. It is therefore vitally important to correct these shortcomings if securitisation is to play its crucial role in helping to fund economic activity and restore much needed growth. We therefore urge the G20 Finance Ministers and Central Bank Governors to take account of industry comments on the proposed framework, and re-issue proposed rules for further comment.”

Strengthening the Financial Stability Board
“GFMA strongly supports the establishment of the FSB as a legal entity with strengthened governance and enhanced capacity to coordinate the development and implementation of financial regulatory policies, while maintaining strong links with the Bank for International Settlements (BIS).”

Strengthening the Oversight and Regulation of Shadow Banking
“GFMA welcomes the FSB’s engagement with market participants and supports the furtherance of the FSB’s stipulated objective “to ensure that shadow banking is subject to appropriate oversight and regulation to address bank-like risks to financial stability emerging outside the regular banking system while not inhibiting sustainable non-bank financing models that do not pose such risks” in particular, to mitigate systemic risk and regulatory arbitrage. GFMA believes that shadow banking can contribute positively to the financial system by providing significant funding to capital markets and thus the real economy, and by diversifying risk in the financial system. We would be concerned with any presumption that shadow banking is inherently bad for financial stability and do not believe that activity in the shadow banking system per se should be discouraged.”




1.  The Global Financial Markets Association (GFMA) brings together three of the world’s leading financial trade associations to address the increasingly important global regulatory agenda and to promote coordinated advocacy efforts. The Association for Financial Markets in Europe (AFME) in London and Brussels, the Asia Securities Industry & Financial Markets Association (ASIFMA) in Hong Kong and the Securities Industry and Financial Markets Association (SIFMA) in New York and Washington are, respectively, the European, Asian, and North American members of GFMA. For more information, visit