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SEC says Financial Stability Board “should not lead new regulatory architecture”

Wednesday 2 June 2010 - by Iain Anderson

The US Securities and Exchange Commission has said the Financial Stability Board may not be the right body to carry out long-term reform of the financial system.

Speaking at the Global Financial Forum in New York in April, International Affairs Director Ethiopis Tafara said the FSB, which was created in 2009 following the London G20 Summit, was a political creation.

He said: “The FSB is fundamentally a political animal. FSB members are coloured by their own interests.”

Tafara called for bodies such as the Bank for International Settlements and the International Organization of Securities Commissions to be the lead bodies in the development of a new global regulatory architecture.

He said: “These bodies are most likely to develop the solutions we need. They are equipped and have had the mandate to implement standards.”



He did call for a multilateral solution to regulatory reform but cautioned against the current approach. “There are different regulatory approaches within the FSB and I am not sure it can resolve these differences.”

Tafara said it was important to ensure enforcement co-operation and supervisory co-operation was achieved on an international level.

He said: “Supervisory co-operation is more difficult to do because of philosophical differences between regulators but it is perhaps more important.”


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