on this issue in late march and has held consultative meetings recently. final policy recommendations are expected in the summer. • the fsb is working to have the hedge fund industry bodies bring forward proposals for high quality global best practice standards for hedge fund managers. these are now expected in may. the various interested bodies will assess their adequacy and report in the fall. three distinct efforts are underway internationally on other systemically relevant entities and products : • the joint forum is advancing its project on the differentiated nature and scope of regulation. it covers four areas : ( i ) consolidation and group - wide approach, which deals with non - regulated entities within groups ; ( ii ) hedge funds ( other funds, such as money market funds, will be considered at a later stage ) ; ( iii ) mortgage originators and brokers and other intermediaries ; and ( iv ) risk transfer mechanisms, focusing on credit risk transfer instruments and associated markets. • this group is drawing on iosco ’ s work on unregulated markets and products, focused on securitised products and credit derivatives markets – a consultative document in this area will be put out in the next days. • the imf and the bis are advancing their work on methodologies to quantify systemic risk and identify systemically relevant institutions and activities. there will be discussion in the weeks ahead on the expectations for joint delivery for the fall. all the above address a few of the areas for actions highlighted during the london summit. in addition, • on supervisory colleges, the fsb is reviewing progress in the establishment and operation of the colleges. it is expected that colleges for all selected large and complex groups will have been established by june. • on cross - border crisis management, firm - by - firm groups will be established shortly to review contingency planning for the institutions that have fsb supervisory colleges. • the g20 also called on the fsb and standard setters to assess and raise supervisory and regulatory standards and codes, drawing efficiently on existing processes – including the joint imf / world bank financial sector assessment program ( fsap ). three related objectives under this headings include ( i ) fostering greater adherence to international standards ; ( ii ) helping to identify jurisdictions that lag behind in terms of their implementation of these standards ; and ( iv ) supporting a peer review process among fsb members. the fsb, with its expanded mandate and membership, is well placed to carry through and build on these various initiatives.

mario draghi : financial stability board – various initiatives statement by mr mario draghi, governor of the bank of italy and chairman of the financial stability board, to the international monetary and financial committee, washington dc, 25 april 2009. * * * in the last several weeks we have witnessed a modest revival in market confidence. it appears that the worst scenarios regarding prospects for the global economy and financial system are no longer quite so prominent in the minds of market participants. this offers us a unique window of opportunity both for short - term actions to stabilise institutions and promote credit extension, and for implementing measures to strengthen the system for the longer term. our main challenge is to break the negative feedback loop between the financial system and the real economy. repairing the balance sheets of financial institutions is a key part of this, and authorities have taken a range of actions to inject capital into banks, guarantee their liabilities and reduce or remove their exposures to bad assets. the ultimate objective of these measures should be to create an environment in which banks are able to repair their balance sheets through sustainable earnings growth and raise the capital they need from private markets at a relatively low cost. this also means providing enough transparency about risk exposures to allow the market to confidently distinguish strong from weak banks, and reducing market uncertainties on the future treatment of different classes of claimants. regulatory stress tests are a central part of this process, as are efforts to improve disclosure. another important part of breaking the feedback loop is to take steps to maintain credit extension to creditworthy borrowers. this has involved, and will continue to involve, a role for public sector balance sheets, including central bank lending and a variety of programmes by fiscal authorities. steps to restart securitisation markets, with improved transparency and incentive structures building on the lessons of the crisis, can also help to restore credit flows, while enabling banks to clear their warehoused assets. governments can help here by supporting transparency and standardisation initiatives in the private sector. in the short term, another useful step might be providing guarantees or wraps for the senior tranches of new securitisation issues that conform to strengthened standards of transparency. as we take steps to revive credit markets, we should be especially mindful of the need to maintain an integrated global financial system. cross - border financial flows have fallen dramatically, among both advanced and emerging economies. this would not be a concern to the extent that it merely reflected a broader process of deleveraging and reduced risktaking.