Summary of FSB Policy Framework Implementation Across Jurisdictions
Core Content Overview
This document provides jurisdiction-specific summaries of the implementation of the FSB Policy Framework for shadow banking entities, focusing on three key areas: sector size and growth, overseeing authority and entity types by economic function (EF), and available policy tools. It also outlines the implementation of the FSB Policy Framework across four operational principles (OP1 to OP4). The data and classifications are based on submissions from jurisdictions to the FSB shadow banking peer review and 2015 monitoring exercises, with some inconsistencies noted in entity classification across jurisdictions.
Main Inconsistencies and Notes
- Classification inconsistencies: The 2015 information-sharing exercise revealed differences in how jurisdictions classify entities into economic functions. These inconsistencies affect comparability of data across countries.
- Narrow measure of shadow banking: The 2015 exercise used an activity-based 'narrow measure' of shadow banking, which may overestimate systemic risk.
- Data conversion: Financial figures are converted into USD using exchange rates provided by jurisdictions, and some data is rounded off for clarity.
- Non-comparability: Due to the above factors, data and information are not strictly comparable across jurisdictions.
Sector Size and Growth
Argentina
| Category |
2014 (US$ trillion) |
2014 (% of GDP) |
Growth Rate (%) (2011-2014) |
| Financial institutions |
0.4 |
76 |
7 |
| OFIs |
0.03 |
6 |
21 |
| Shadow banking |
0.03 |
6 |
22 |
Australia
| Category |
2014 (US$ trillion) |
2014 (% of GDP) |
Growth Rate (%) (2011-2014) |
| Financial institutions |
6 |
429 |
2 |
| OFIs |
1 |
64 |
-1 |
| Shadow banking |
0.4 |
27 |
-3 |
Brazil
| Category |
2014 (US$ trillion) |
2014 (% of GDP) |
Growth Rate (%) (2011-2014) |
| Financial institutions |
9 |
523 |
4 |
| OFIs |
2 |
147 |
5 |
| Shadow banking |
1 |
58 |
8 |
China
| Category |
2014 (US$ trillion) |
2014 (% of GDP) |
Growth Rate (%) (2011-2014) |
| Financial institutions |
16 |
622 |
1 |
| OFIs |
2.5 |
96 |
-3 |
| Shadow banking |
1.6 |
61 |
-5 |
Note: Shadow banking sector sizes are not strictly comparable due to classification inconsistencies and varying definitions of shadow banking activities.
Overseeing Authority and Entity Types by Economic Function (EF)
Argentina
| EF |
Overseeing Authority |
Entity Type |
| EF1 |
CNV |
Hedge funds |
| EF2 |
BCRA |
Finance companies |
| EF3 |
- |
- |
| EF4 |
BCRA |
Mutual guarantee societies |
| EF5 |
CNV |
Financial trusts |
Australia
| EF |
Overseeing Authority |
Entity Type |
| EF1 |
ASIC |
Hedge funds, mortgage trusts; other funds; money market funds |
| EF2 |
ASIC |
Finance companies |
| EF3 |
ASIC |
Money market corporations (broker dealers) |
| EF4 |
APRA |
Lenders mortgage insurers |
| EF5 |
ASIC |
Structured finance vehicles |
Brazil
| EF |
Overseeing Authority |
Entity Type |
| EF1 |
CSA jurisdictions |
Fixed income funds; hedge funds; alternative funds; property funds; money market funds; convertible bond funds; physical ETFs; cash collateral reinvestment programmes |
| EF2 |
CMN, BCB |
Finance companies; non-prudentially regulated FIs that originate mortgages; MICs |
| EF3 |
CMN, BCB |
Broker-dealers |
| EF4 |
OSFI, MOF |
Private mortgage insurers |
| EF5 |
CSA jurisdictions |
ABCP; NHA MBS; synthetic ETFs |
China
| EF |
Overseeing Authority |
Entity Type |
| EF1 |
CBRC |
Collective trusts, MMFs, fixed income funds, other funds |
| EF2 |
- |
- |
| EF3 |
- |
- |
| EF4 |
- |
- |
| EF5 |
- |
- |
Available Policy Tools
Argentina
| EF |
Policy Tools |
| EF4 |
Capital requirements, Restrictions on scale and scope of business, Enhanced risk management to capture tail events |
Australia
| EF |
Policy Tools |
| EF1 (Hedge funds) |
- |
| EF1 (FI funds) |
Suspension of Redemptions, Limits on investment in illiquid assets, Liquidity risk management requirements |
| EF2 |
Restrictions on types of liabilities, Disclosure requirements for retail debentures |
| EF3 |
Liquidity requirements, Capital requirements, Restrictions on use of client assets |
| EF4 |
Capital requirements, Restrictions on scale and scope of business, Enhanced risk management practices |
| EF5 |
Restrictions on maturity / liquidity transformation, Restrictions on exposures to or funding from banks / OFIs |
Brazil
| EF |
Policy Tools |
| EF1 |
General statutory duty of fund manager to act in best interest of fund, internal control and system requirements |
| EF1 (FI funds) |
Suspension of Redemptions, Redemption Fees/ restrictions, Limits on investment in illiquid assets, Limits on asset concentration, Limits on leverage, Restrictions on maturity of assets |
| EF2 |
Leverage limits, Restrictions on types of liabilities |
| EF3 |
Liquidity requirements, Capital requirements, Restrictions on use of client assets |
| EF4 |
Capital requirements, Restrictions on scale and scope of business, Enhanced risk management practices |
| EF5 |
Restrictions on maturity / liquidity transformation, Restrictions on exposures to or funding from banks / OFIs |
China
| EF |
Policy Tools |
| EF1 (Collective trust companies) |
Limits on leverage, Restrictions on maturity of portfolio assets |
| EF2 |
- |
| EF3 |
- |
| EF4 |
- |
| EF5 |
- |
Implementation of FSB Policy Framework
OP1: Financial Stability Oversight
- Argentina: Central bank (BCRA) is implicitly responsible for financial stability. BCRA, in coordination with CNV and SSN, has the capacity to identify, measure and mitigate systemic risk. Coordination formalised through MOUs.
- Australia: CFR (Council of Financial Regulators) is the main coordinating body. APRA monitors bank relationships with NBFEs. ASIC oversees retail financial products. RBA coordinates shadow banking assessments.
- Brazil: CMN has a formal mandate for financial stability. EF classification completed. Risk mapping completed. Data gaps exist, but some tools from the FSB Policy Toolkit are available.
- China: CBRC is responsible for trust companies and WMPs. No information provided on other NBFEs. Risk mapping completed. Leverage and maturity transformation restrictions in place.
OP2: Data Collection and Risk Metrics
- Argentina: Insufficient information to calculate risk metrics. No specific plans to improve data availability.
- Australia: Data gaps in risk metrics for investment funds and EF2/EF5. Data shared through CFR and bilateral agreements.
- Brazil: Data sources include regulatory reporting and statistics. Gaps in data for EF1 and EF3. Plans to enhance data availability and quantitative metrics.
- China: Data provided for collective trust products only. Insufficient data for maturity and liquidity transformation metrics. CBRC plans to improve liquidity indicators.
OP3: Public Disclosure
- Argentina: No specific public disclosure requirements for NBFEs. BCRA publishes reports on financial stability.
- Australia: NBFEs disclose information to retail investors. RBA and ASIC publish reports and aggregated data.
- Brazil: Disclosures focus on investor information. No changes planned. CVM considers publishing more data.
- China: Public disclosures focus on investor information. CBRC revises disclosure requirements for WMPs. CTA publishes quarterly statistics.
OP4: Classification and Risk Mapping
- Argentina: EF classification completed for EF1, EF2, EF4, and EF5. Risk mapping completed. Some policy tools available.
- Australia: EF classification and risk mapping completed. Policy tools available for EF1, EF2, EF3, EF4, and EF5.
- Brazil: EF classification and risk mapping completed. Policy tools available for EF1, EF2, EF3, EF4, and EF5.
- China: EF classification completed for EF1 only. Risk mapping completed. Policy tools available for EF1 only.
