FSB Deputy Secretary General speech Guardrails for growth: ensuring financial stability through thoughtful regulation

Martin Moloney, Deputy Secretary General of the Financial Stability Board (FSB), has delivered a speech at the International Council of Securities Associations' Annual General Meeting on the potential for reforming financial regulation in a way that supports, rather than stifles, economic growth. Mr Moloney placed particular emphasis on pursing sustainable economic growth, supported by stable financial markets, for effective regulatory reform and warned against cycles of deregulation and re-regulation. He urged policymakers to critically assess and streamline existing regulatory regimes, noting that both legislative and rule-making processes often fall short in designing optimal regulatory frameworks.

Mr Moloney outlined three key challenges with effective regulatory redesign:

• Complexity of objectives. Regulatory tools must now serve multiple goals, which can make it difficult to calibrate them proportionately.
• Industry consultation. While essential, industry feedback tends to gravitate toward consensus on the 'lowest common denominator' not necessarily reflecting the changes that industry would most benefit from.
• Global interdependence. Regulatory reform is constrained by the need for international consistency as jurisdictions cannot diverge significantly from global norms when creating national-based legislation without facing cross-border consequences.

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