by Charlene Calhoon, Senior Analyst, U.S. Government Accountability Office
Over the past year, the Working Group on Financial Modernization and Regulatory Reform (WGFMRR) has focused primarily on the impact of the COVID-19 pandemic on the financial sector, governments’ responses to the crisis, and audit work assessing economic recovery efforts.
The INTOSAI Governing Board established the working group in 2012 to enhance INTOSAI members’ expertise in overseeing national financial systems after the 2008 financial crisis. Since 2014, the working group has met annually to share information on audit work and discuss key trends in the financial sector with experts from the International Monetary Fund (IMF), Financial Stability Board (FSB), and other international and domestic organizations.
In conducting knowledge sharing during the pandemic, the working group adjusted its communication practices and focus to better serve the needs of its membership. The working group adopted video conferencing technology to accomplish work originally planned for an in-person annual meeting hosted by the Office of the Auditor General of Canada (OAG). Members also shared responsibility for hosting virtual meetings.
In May 2020, the U.S. Government Accountability Office (GAO) hosted the working group’s first virtual forum on the pandemic’s impact on the economic and financial sectors. Working group members shared information on their national governments’ responses to the pandemic and ongoing audit work to assess COVID-19 recovery efforts. Economists from GAO and OAG provided an overview of global financial conditions, noting the pandemic’s significant impact on the financial system and that economic recovery would likely be prolonged until a vaccine is widely available. Experts from the FSB and Basel Committee on Banking Supervision provided an overview of their ongoing responses and planned activities related to the pandemic, such as efforts to collect and share information with members and other standard-setting bodies.
The working group held two more virtual meetings in 2020. During a July meeting hosted by GAO, members provided updates on audit work related to economic recovery efforts, pandemic preparedness, and disaster management, and discussed the challenges of auditing in a virtual environment. During a September meeting hosted by OAG, members learned about climate risks to financial stability during a presentation by the Chair of the Central Banks and Supervisors Network for Greening the Financial System.
The China National Audit Office hosted the working group’s fourth virtual meeting in January 2021. Economists from the IMF, China International Capital Corporation, and the Bank of China discussed the outlook for the global economy and financial system in the aftermath of the pandemic and analyzed the U.S. and China’s responses to the pandemic. Five working group members also presented on recent audit work related to COVID-19, banking supervision, and the benefits and costs of anti-money laundering regulations.
The working group plans to host quarterly virtual meetings for the remainder of 2021 to continue sharing information on audit work and responses to the pandemic. The working group also plans to cover other key topics affecting the financial sector, such as climate change, financial technology, and cybersecurity. To facilitate ongoing information sharing and collaboration between meetings, the working group plans to update its new internal website—developed in collaboration with SAI India—with discussion topics, relevant audit reports, and other resources of interest to its members.