Sustainable Finance
The NFSociety joins the public and private sector through the Sustainable Finance Working Group (SFWG) to identify and promote capital markets solutions that support the development and growth of green finance. SFWG includes representatives from major institutional investors, commercial banks, ratings agencies and other interested stakeholders, as well as public sector collaborators. Broad themes covered by SFWG include scaling the green finance market, collaboration with official sector initiatives and translating political momentum to tangible action that facilitates market development.
Market Fragmentation
Financial markets are experiencing increasing levels of fragmentation, which undermine the progress that has been made in re-building resilience of the global financial system since the financial crisis and result in negative consequences for economic growth and job creation. Fragmentation resulting from excessive regulatory and supervisory divergence can trap capital, liquidity, and risk in local markets, create significant financial and operational inefficiencies resulting in additional unnecessary costs to end-users, and reduce the capacity of financial firms to serve both domestic and international customers.
It is critical that market fragmentation be addressed to avoid these consequences and the correlated impact on the global financial system and the world economy. As jurisdictions act unilaterally without proper coordination, it also can create level playing field problems, affect comparability across jurisdictions and even risk sensitivity in regulatory frameworks.
Anti-Money Laundering
Cross-border criminal financial activity goes to support terrorism, human trafficking, drug smuggling and cyber-attacks.
The global framework for AML/CFT is still not as effective as it could be, with the amount of money laundered internationally each year estimated at 2 percent to 5 percent of global GDP. Though tens of billions have been invested in the effort to tackle this problem, more needs to be done. A combination of regulatory reform and the deployment of new technology could significantly improve efforts of governments and the financial industry to counter the threats posed by international criminal financiers.
Data Policy
Amid an increased emphasis on data security and data privacy in many jurisdictions, and with an increasingly digitized and inter-connected global economy, the ability for data to flow and be utilized across borders in increasingly important.
With various motives (for instance, on the grounds of law enforcement, national security, personal data protection or economic protectionism), data localization measures can also bring adverse side effects for IT infrastructure, risk management, cyber security and anti-money laundering practices, as well as reducing access to financial services and markets in some countries.