The Institute of International Finance (IIF) and the Global Financial Markets Association (GFMA) today sent a joint letter to the Financial Stability Board (FSB), Basel Committee on Banking Supervision (BCBS), International Organization of Securities Commissions (IOSCO) and Committee on Payments and Market Infrastructures (CPMI) to encourage the development of global principles on the operational resilience of financial institutions.
Operational resilience has been of high importance for both public sector authorities and financial institutions for a long time and has come into focus more generally during the COVID-19 pandemic. Financial institutions have remained resilient under the extraordinary circumstances created by the pandemic, which is a result of significant efforts and investment in the preceding years to build resilient processes and plans to respond to different types of operational threats and challenges.
Operational resilience is extremely important for the public and private sectors to maintain confidence in the financial industry and support financial stability and economic growth. The Associations and our global members acknowledge the importance of operational resilience for individual institutions, and across the financial sector as a whole, in support of customers, markets and the communities and broader economies they support nationally and globally. We support collaborative efforts to continuously improve and strengthen the level of operational resilience across the global financial system.
A key priority for our members is global coordination and alignment among policymakers and supervisors on the policy outcomes, terminology and supervisory approaches to operational resilience. Indeed, fundamentally different definitions of ‘operational resilience’ are being used by authorities across jurisdictions, and various regulatory approaches have been introduced already. As achieving operational resilience maturity is a priority across the global financial sector, the Associations and our members believe that it is imperative for global standard setters – in a collaborative effort with the industry – to develop global principles to promote consistency across and within jurisdictions. The global standard setting bodies are uniquely organized to coordinate, collaborate, and develop global principles that align outcome objectives across the global financial system. As multiple regulatory authorities are well underway in the development of approaches, it is crucial for the global standard setters to engage now before fragmentation becomes firmly entrenched.