Committee on the Global Financial System, Committee on Payment and Settlement Systems - International Finance

Committee on the Global Financial System

The Committee on the Global Financial System ( CGFS ) tracks changes in world financial markets and analyzes their implications for international financial stability. Chairman of the committee is Mark Carney, Governor of the Bank of Canada. Members of the committee consist of deputy governors and other high-level officials from the central banks of 23 developed and developing countries, as well as the economic adviser of the BIS. The committee focuses on problems with sovereign debt in the euro area and their impact on global financial stability and bank financing. Other issues are the international global implications of monetary incentive programs in key advanced economies, in particular their impact on portfolio investment flows to emerging markets. In order to deepen its understanding of current policy issues, the Committee organized a number of events that bring together representatives of financial institutions and central banks of many countries:

• meetings with market participants, which discussed the problems of investment in bank debt, taking into account the phasing out of support by the public sector of banks and proposed changes in banking regulation;

• regular seminars for central banks, including a seminar organized by the People's Bank of China to assess the impact of capital injections to ensure international financial stability, as well as the role of monetary policy and the role of the exchange rate in the flow of capital flows;

• Discussion with the representatives of insurance companies and pension funds of the most important issues of the new international accounting standards and current legislation, as they affect the demand for fixed-income assets and the functioning of international financial markets in general.

The committee set up a working group on macroprudential policy issues, having formed its main tasks in resolving issues of systemic financial risks in the light of the international debt crisis. Other groups specialize in the areas of international banking, including changes in the management of banks on various financing issues and liquidity problems due to the effects of public debt management on central bank operations and monetary and financial stability. The Committee participated in global political forums to discuss the main implications of recent financial reforms. Among them is a high-level seminar jointly with the International Commission on Securities (IOSCO) and the Committee for Payment and Settlement Systems (CPSS). This seminar was devoted to the analysis of access to key counterparties (CCPS) in the over-the-counter derivatives market, etc.

Committee on Payment and Settlement Systems

The activities of the Committee on Payment and Settlement Systems (CPSS) are aimed at strengthening the financial market infrastructure by promoting safe and efficient payment, clearing and settlement mechanisms. The Committee also promotes cooperation between central banks, not included in it, on payment, clearing and settlement issues and provides support and assistance in meetings organized in cooperation with regional central banks. The Committee on Payment and Settlement Systems is headed by William S. Dudley - President and CEO of the Federal Reserve Bank of New York.

The Market Committee. The Market Committee, chaired by Hiroshi Nakaso (Deputy Governor of the Bank of Japan), is a forum for senior central bank officials to conduct joint monitoring of developments on financial markets and assessing their impact on central bank liquidity management operations. Currently, the committee has 21 central banks of the world's leading countries.

The disorder of public debt markets, the continued use of non-traditional methods (which are understood as state regulation measures) and the ongoing reforms in the financial sector provide a general background for discussions in this committee - this is how the BIS is described in the report. It can be concluded that it is necessary to closely monitor the situation of the eurozone's government bond markets and the banking sector, the impact of instruments of influence on the financing of markets and operations of the ECB and the central EU countries and other central banks. The Committee also considered relevant technical issues, such as the current practice of using borrower add-ons in secondary securities transactions, between the public and private sectors. The new market turmoil and slower than expected economic recovery in 2012, restrains the failure of leading central banks from the "non-traditional methods of policy-making" and the necessary additional measures in a number of cases. The consequences of such policies in financial markets and the risky behavior of investors across all asset categories form another key topic for discussion in this BIS committee. To this end, the committee set up a working group to identify the level of activity of the international currency and futures markets to provide relevant information to the BIS.

Central Bank Board Group (BIS). This group consists of representatives of nine central banks. It is headed by Stanley Fischer (the head of the Bank of Israel) and serves as a platform for exchanging views on improving the structure and activities of central banks as state political institutions. The Group pays paramount attention to preserving the changes in financial stability of central banks and, for this purpose, has developed recommendations to strengthen their financial sustainability.

Irving Fisher Statistics Committee (IFC ). IFC is a forum for economists and statisticians of central banks to address issues of international statistics related to monetary and financial systems. 72 central banks and relevant international and regional organizations are members of the committee (its chairman is Manuel Marfan, deputy governor of the Central Bank of Chile). The fifth conference of the BIS-based committee was convened in August 2011 to review the work on resolving the gaps in the reporting data of central banks during the international financial and economic crisis. Participants also discussed the results of a survey of the committee on proposals relating to the financial crisis. The CIF organized seminars on the following issues:

• use of business reviews by central banks (together with the National Bank of Ukraine);

• information requirements for monitoring the activity of options markets (together with the People's Bank of China);

• Inflation measurement (one part with the Saudi Arabia Currency Agency, another part with the Latin American Center for Monetary Research and the Central Bank of Peru);

• Study of local (resident) views on financial positions versus national ones (in conjunction with the Interagency Group on Economic and Financial Statistics).

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