Joint Statement on the U.S.-UK Financial Regulatory Working Group

The U.S. Department of the Treasury, USDT, has published a press release informing about the latest UK- U.S. Financial Regulatory Working Group meeting. The session- which was attended by persons representing the Bank of England, the Financial Conduct Authority, and the HM Treasury on the part of UK regulators and by representatives of the USDT, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, and the Securities and Exchange Commission – thereby focused on the following key topics:
(1) international banking issues: Regarding banking matters, attendees presented insights into the progress made in their respective domestic banking systems to ensure soundness and stability. The Working Group recognized the efforts made by the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (BCBS) in response to the events that took place in March 2023, which include the FSB’s upcoming report on the initial insights gained from the resolution process of the failed banks. Conversations also centered around the banking regulations in each jurisdiction, particularly with respect to resolution-related matters. Participants further emphasized the significance of aligning local banking reforms with Basel III and the necessity of continuous international collaboration when carrying out these reforms.
(2) climate-related financial risks and sustainable finance: Both parties discussed climate-related financial risks and sustainable finance within their respective roles in the financial market. They also discussed progress made in this area, highlighting the International Sustainability Standards Board’s (ISSB) final standards and the endorsement of these standards by the International Organization of Securities Commission (IOSCO) whose members were encouraged to consider adopting the ISSB standards within their jurisdictions. The regulators of both the UK and the U.S. agreed that the ISSB standards should bring about much needed compatibility and comparability in climate-related disclosures. The UK authorities also shared information about their Transition Plan Taskforce and an ongoing consultation on ESG ratings regulation.
(3) digital finance: With respect to digital finance, participants discussed various aspects of digital finance, particularly focusing on digital assets and crypto markets. They also informed each other of recent developments and updates in their respective jurisdictions and emphasized the need for effective regulation and oversight. Both parties noted that they strongly support international efforts through organizations like the FSB to drive standard-setting across borders. In this context, both also noted that any international recommendations or principles need to be adopted globallyto avoid regulatory arbitrage. In addition, there was a brief discussion on the approaches of the U.S. and the UK regarding central bank digital currencies, digital payments, distributed ledger technology, and artificial intelligence.
Other issues discussed at the meeting were the current economy and related issues, developments in the non-banking sector, and cross border cooperation and the significance of such for the global financial market.
To conclude, all participants agreed that many of the aspects discussed at the Working Group meeting are of great importance and that further cooperation and information exchange would be beneficial to all parties involved.