Following a meeting in Basel, Switzerland, Monday, the Financial Stability Board (FSB) highlighted some of its priorities for ongoing financial sector reform, including recovery and resolution planning for troubled firms, designating systemically important insurers, and enhancing LIBOR oversight.

The FSB reports that its latest meeting focused on the vulnerabilities affecting the global financial system, and the progress of work to strengthen global financial regulation; noting that despite the progress so far, “some parts of the system remain in a state of incomplete repair.”

In particular, it says that some jurisdictions need to continue to improve the capitalisation of their banking systems. Both Europe, and parts of the world where credit growth has been very rapid recently, must build further resilience in their banks, it notes.

Additionally, amid heightened market volatility in recent weeks, it says that firms and regulators should incorporate “considerably elevated interest rate risk, widening credit spreads, falls in asset prices, and material volatility in foreign exchange markets and capital flows” into their stress testing efforts.

As for its own work, the FSB announced that it will be releasing a set of guidance papers next month on the development of effective resolution strategies, stress scenarios and recovery triggers for financial firms. Its work on effective resolution regimes for financial market infrastructures, the resolution of systemic insurance groups, the protection of client and custody assets in resolution, and information sharing among authorities, will be issued for public consultation later this summer, it added.

At this latest meeting, the FSB also reviewed the assessment methodology and policy measures for systemically important insurers, developed by the International Association of Insurance Supervisors (IAIS). Based on this assessment methodology, the FSB and national authorities, in consultation with the IAIS, will identify an initial list of G-SIIs in July; and, it reports that a decision on the G-SII status of, and appropriate risk mitigating measures for, major reinsurers will be made in July 2014.

As with banks that have already been designated as systemically important, these firms will face higher capital requirements, greater oversight, and recovery and resolution planning requirements. “As a foundation for higher loss absorbency requirements, the IAIS will as a first step develop straightforward, backstop capital requirements to apply to all group activities, including non-insurance subsidiaries, to be finalised by the time of the G20 Summit in 2014,” it adds.

The FSB also says that it has decided to establish a steering group of regulators and central banks to coordinate reviews of existing interest rate benchmarks, such as LIBOR. The group “will examine whether the governance and processes around these benchmarks meet agreed international standards,” it says, adding that the group will be chaired by Martin Wheatley, managing director of the UK’s Financial Conduct Authority (FCA), and Jeremy Stein, governor of the US Federal Reserve Board.

The group will also convene a group of market participants, the FSB says, which will review options for reference rates that meet the needs of the private sector, and any potential transition issues.

Finally, the FSB notes that it also discussed progress in the implementation of reforms to over-the-counter (OTC) derivatives markets; reforms to the shadow banking system; and, on harmonizing accounting standards and improving auditing standards.

It says it was also agreed that “global aggregation of trade repository data is essential to enable comprehensive monitoring of risks to financial stability, and launched a feasibility study of options for how information from trade repositories can be aggregated and shared among authorities.” The results of the study will be published in the first half of 2014, it says.