In a speech at the International Council of Securities Associations’ annual general meeting, Financial Stability Board Deputy Secretary General Martin Moloney argued that regulatory reform aimed at boosting GDP growth is only durable if it preserves stable financial markets and avoids a recurring cycle of deregulation followed by re-regulation. He emphasised that the remarks drew on personal experience and that the FSB does not seek to steer jurisdictions’ regulatory reform programmes. Moloney highlighted how regulatory reform has become harder as securities and financial stability objectives have become increasingly intermingled, particularly since the post-2008 shift that brought system-wide monitoring of non-bank financial intermediation and a focus on measures such as margining and clearing and liquidity management requirements. He argued that judging proportionality is complicated by contested policy goals and the difficulty of quantifying regulatory benefits, while industry consultation can produce lowest-common-denominator proposals or misdiagnose true constraints. He also pointed to the international dimension of domestic reforms, including the risk of a cross-border “race to the bottom”, and suggested reform efforts should stay within globally recommended standards, apply a cross-border reputation test, and prioritise process and design improvements such as faster authorisation, reducing duplicative KYC uncertainty, technological neutrality, more aligned reporting, and safe harbour options rather than simply lightening solvency or lending rules. As a practical approach, he advocated evidence collection to test key assumptions, use of academic input where possible, and piloting reforms through test cases before full roll-out, with compliance with the FSB’s high-level recommendations treated as a non-negotiable baseline.

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