International & EU

 

Purpose of Groups

FSA has set up a number of expert groups with industry representatives to take forward discussion of specific policy issues. The issues under discussion have been identified by the FSA in consultation with the Standing Groups on Credit Risk, Securitisation, Credit Risk Mitigation and Operational Risk.

The Pillar 2 Standing Group has been established very recently. Certain technical issues relevant to Pillar 2 are being reviewed in existing expert groups, but a number of Pillar 2 expert groups may be set up at a later date.

Membership

Each expert group is facilitated by a member of the FSA with a designated industry lead responsible for industry input delivery. Expert Groups typically comprise a small number of industry representatives as well as at least one trade association representative.

List of Groups

 

Credit Risk

  • Low Default Portfolios
  • Aggregation
  • External Models
  • Standardised Approach
  • Stress Testing & Procyclicality
  • Large Exposures & Solo Consolidation

Securitisation

  • Internal Assessment Approach
  • Grandfathering securitisations
  • Master trusts

Credit Risk Mitigation

  • E*
  • Property Valuation and Insurance
  • Application process for Eligible Physical Collateral
  • Collateralised OTC Derivatives
  • Internal models for repo-style transactions

Operational Risk – Corporate Governance Issues

  • Partial Use
  • Independence
  • Documentation
  • Use Test
  • Loss Data
  • Reporting
  • Indicator Calculation

Operational Risk - Quantitative AMA Modelling Issues

  • Expected Loss
  • Soundness Standard
  • Data Integrity and Standards
  • Correlation

Discussion and decision-making process

Where an issue arises that requires senior level involvement from firms or the FSA, it will The groups are meeting frequently to develop thinking and provide regular feedback to their respective Standing Groups. Each group is producing a paper which will:

  • Set out the issue in detail;
  • Explicitly consider the requirements of the recast BCD and any responsibilities imposed upon the FSA by that Directive or FISMA;
  • Explicitly consider the practicality of implementation and CBA considerations; and
  • Set out a clear proposal and industry and FSA views on that proposal.

Following discussion in the relevant Standing Group, each paper will be taken to FSA's Prudential Risk and Disclosure sub-board, chaired by Paul Sharma, for a decision.

We expect that all papers will have been discussed and decisions reached by end July. The decisions will be reported to the Standing Groups and made public.