In this report, FedFin assesses the conclusions announced today by the Financial Stability Board as it crafts the regulatory agenda for next month’s G-20 summit, which has taken on even greater significance in recent weeks as Europe debates sweeping policy actions to limit contagion risk. The EU Wednesday indicated work now is seriously under way on resolution protocols, a pan-European deposit guarantee system, direct aid to troubled institutions, and a common Euro bond. The FRB today also announced action aimed not only at current market conditions, but also allaying FSB and G-20 concerns that the U.S. is lagging others in implementing Basel III and the II.5 market reforms. The FRB will meet next Thursday to propose the U.S. version of the Basel standards (see FSM Report CAPITAL180) and finalize controversial trading-book standards that do not include ratings references (see FSM Report RATINGS48).

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