Asian members of the Group of 20 major economies have not introduced laws to prevent another “too big to fail” financial crisis, the world’s top financial watchdog warned on Friday.
The Financial Stability Board (FSB) on Friday published its Second
Thematic Review on Resolution Regimes. The report is part of series that show
how countries are implementing the Key Attributes of Effective Resolution
Regions for Financial Institutions. In short, the Key Attributes show how
G20 countries are supposed to implemented rules to avoid a repeat the
government bailouts of lenders that happened in the wake of the 2008 fiscal
The FSB, which can “name and shame” those which do not yet comply with
its rules, said member countries that do not yet have these laws include China,
Chinese territory Hong Kong, India, Indonesia, and Korea. But Asian members are
not alone. Other countries that have not complied include Argentina, Australia,
Brazil, Canada, Mexico, Russia and Saudi Arabia.
Membership in the G20 includes a commitment to implement the rules it
has agreed to. And the FSB has the responsibility to make sure they follow the
“Only the European Union member states, Switzerland and the United
States are currently able to achieve a creditor-financed resolution to support
continuity of critical functions,” the report said.
“Substantial work remains to put in place a full set of resolution
powers and recovery and resolution planning requirements,” Fernando Restoy,
Deputy Governor of the Bank of Spain and chair of the team who carried out the