SOURCE: Milken Institute

Milken Institute

September 05, 2013 21:18 ET

MEDIA ALERT: New From Milken Institute on G20 Banking Regulation: "Systematically Important Banks in the Post Crisis Era: The Global Response and 135 Countries' Responses"

LOS ANGELES, CA--(Marketwired - Sep 5, 2013) -

New Milken Institute white paper, "Systematically Important Banks in the Post Crisis Era: The Global Response and 135 Countries' Responses"

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G20 leaders in St. Petersburg, Russia are looking at agendas for financial reform -- with a heavy emphasis on banking. "Systematically Important Banks in the Post Crisis Era" outlines how G20 member countries have been working to regulate systematically important banks in an effort to stabilize the world economy. Strikingly, countries are more similar than different in the measures they have adopted for regulating and supervising such banks.

New data from the post-crisis regulation and supervision of systematically important banks by 135 countries around the world are also highlighted and summarized in the paper. All G20 members, including the U.S., have pledged to change national laws and policies, as necessary, to keep their commitments.

G20 members, consisting of 19 countries and the EU, account for 86% of the world GDP and 90% of the world's finances. As global economic leaders, members will emphasize the stabilization of systematically significant financial institutions (SIFIs) and, aided by the agent of the G20, the Financial Stability Board (FSB), will monitor the implementation of agreed-upon policies. By analyzing SIFIs on a global "G-SIFI" and domestic "D-SIFI" level, the Institute's paper shows distinctions between the two by level of systemic risk to financial systems. Because the most important among these firms have global operations, requirements for such "G-SIFI"s cannot be effectively implemented at the national level.

"With the G20 taking over the G7's role as the most powerful global economic and financial policy-making forum, the financial system agenda will serve as a strict guideline for its members," said report co-author James Barth, Milken Institute Senior Finance Fellow. "The greatest progress to date in establishing workable regulatory financial standards by the G20 has been in the area of banking, through the Basel Committee on Banking Supervision, including the Basel III bank capital standards."

Conrad Kiechel, Director of Communications
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About the Milken Institute
A nonprofit, nonpartisan think tank, the Milken Institute believes in the power of capital markets to solve urgent social and economic challenges. Its mission is to improve lives around the world by advancing innovative economic and policy solutions that create jobs, widen access to capital and enhance health.