Mark Carney, chairman of the FSB, has launched the process to look at how the G20 agreement on banking security following the financial crisis is working. Basel III is due to enforce new capital and liquidity rules by 2019.
The move by the FSB, which was set up to co-ordinate global bank regulation after the G20 financial crisis meeting in 2009, comes after concerns were raised of a lack of consistency in the way nations and regional authorities such as the European Union were interpreting the rules.
One banking official said the outcome would be a "naming and shaming" exercise because it will become clear where the problems lie.
Banks are supportive of the audit but have not been asked to submit evidence. Regulatory arbitrage is seen as a key issue as countries put in place different rules, sometimes to protect their own financial services.
One banking chief executive said it would be helpful if the FSB called for evidence.
Speaking at the World Economic Forum at the weekend, George Osborne, the Chancellor, said that "Balkanisation" of banking activity was a growing problem.
"We all need to better understand the deleveraging happening in the financial system, an inevitable consequence of a financial crisis and a balance sheet recession," he said.
"But I think the point Mark [Carney] made is something I would like to see more attention to from policymakers over the coming weeks, which is the Balkanisation of European finance which has happened as a number of institutions and individuals have taken actions to protect themselves from the tail risk of things going wrong in the euro.
"[We need to know] what the impact of that would be on the European economy and how that can be unwound, which I think is very important. I think one of the things we can all do is provide regulatory certainty this year."
The FSB has said that consistency of implementation was crucial to protecting the global system from another crisis.
"It's inevitable after a banking crash that you consider how to avoid it happening again and in Britain we have done a lot in looking at how we can better protect the banking system," Mr Osborne said.
telegraph.co.uk
The move by the FSB, which was set up to co-ordinate global bank regulation after the G20 financial crisis meeting in 2009, comes after concerns were raised of a lack of consistency in the way nations and regional authorities such as the European Union were interpreting the rules.
One banking official said the outcome would be a "naming and shaming" exercise because it will become clear where the problems lie.
Banks are supportive of the audit but have not been asked to submit evidence. Regulatory arbitrage is seen as a key issue as countries put in place different rules, sometimes to protect their own financial services.
One banking chief executive said it would be helpful if the FSB called for evidence.
Speaking at the World Economic Forum at the weekend, George Osborne, the Chancellor, said that "Balkanisation" of banking activity was a growing problem.
"We all need to better understand the deleveraging happening in the financial system, an inevitable consequence of a financial crisis and a balance sheet recession," he said.
"But I think the point Mark [Carney] made is something I would like to see more attention to from policymakers over the coming weeks, which is the Balkanisation of European finance which has happened as a number of institutions and individuals have taken actions to protect themselves from the tail risk of things going wrong in the euro.
"[We need to know] what the impact of that would be on the European economy and how that can be unwound, which I think is very important. I think one of the things we can all do is provide regulatory certainty this year."
The FSB has said that consistency of implementation was crucial to protecting the global system from another crisis.
"It's inevitable after a banking crash that you consider how to avoid it happening again and in Britain we have done a lot in looking at how we can better protect the banking system," Mr Osborne said.
telegraph.co.uk
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