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G20 Finance Ministers have agreed to implement fully the Basel-III norms within the agreed timeline.
Basel-III standards written by the Bank of International Settlement's committee on Banking Supervision (BCBS) spell out new capital rules for banks in keeping with their risk profile.
Also, the financial stability board's (FSB) recommendations on over-the-counter (OTC) derivatives and on reducing reliance on credit rating agencies' ratings will now be implemented in an internationally consistent and non-discriminatory way.
This was stated in a communiqué published after the G20 Finance Ministers' talks on Saturday in Paris.
The G20 Finance Ministers also called on the OECD, FSB and relevant international organisations to develop common principles of consumer protection in financial services by their October meeting.
The Finance Ministers of the world's leading economies reaffirmed their commitment to pursue financial sector reforms. “Despite good progress, significant progress remains,” said the communiqué.
The G20 Finance Ministers have asked the International Organisation of Securities Commission (IOSCO) to develop by mid-2011 recommendations to promote markets' integrity and efficiency, notably to mitigate the risks created by latest technologies.
The G20 Finance Ministers also said they were looking forward to the recommendations that the FSB will prepare by mid-2011 on regulation and oversight of the shadow banking system to address the risks, notably of arbitrage, associated with shadow banking and its interactions with the regulated banking system.
The FSB has been called to bring forward for the G20 Finance Ministers' next meeting proposals to strengthen its governance, resources and outreach.
“We urge all jurisdictions to fully implement the FSB principles and standards on sounder compensation practices agreed by the G20 Leaders in Pittsburgh, and call on the FSB to undertake ongoing monitoring in this area, and look forward to receiving the results of a second thorough FSB peer review midyear to identify remaining gaps,” the communiqué added.
The G20 Finance Ministers reaffirmed their commitment to more effective oversight and supervision, including regular stress-testing of banks, building on the Basel committee's principles.
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