PAC Pacific Current Group Ltd

International regulators have made significant headway in putting in place regulatory changes in the wake of the 2008 financial crisis, but the U.S. Treasury is continuing to push for more policies to establish a level playing field between foreign and U.S. banks, said Treasury Under Secretary for International Affairs Nathan Sheets.

Mr. Sheets, who attended the Group of 20 meeting of finance ministers and central bank governors in China late last month, said the officials' agenda remains focused on bank capital and leverage, the resolution of systemically important financial institutions, stability in the shadow banking system and regulating derivatives.

"My sense is that most of the heavy lifting on these reforms has been completed," Mr. Sheets told the Institute of International Bankers' annual conference in Washington. "However, standard-setting bodies will continue to refine and calibrate the capital and liquidity frameworks to promote coherence and effectiveness." He added that the "Basel Committee has signaled that it does not envision significantly increasing overall capital standards from here."

Overall, Mr. Sheets said the regulatory changes adopted following the financial crisis have made the financial system safer despite recent market turbulence.

"Investors are more appropriately pricing the risk of debt instruments and coming to terms with new expectations for banks' return on equity," he said. "My assessment is that these important steps greatly reduce the risk of systemic crises, while still allowing banks to continue to play a critical role in intermediating credit for the real economy."

Mr. Sheets seemed particularly concerned about how foreign regulators are applying "uneven" changes that are "behind schedule" to improve the trading and reporting of certain derivatives contracts. He did, however, note a recent agreement between the European Commission and the Commodity Futures Trading Commission to allow U.S. central counterparties to continue providing clearing services in the European market. He also expects some additional guidance related to the central counterparties system before the G-20 ministers and central bankers meet again in September.

"We continue to urge our fellow G-20 members to act on these critical reforms to foster financial stability, reduce market fragmentation, and support a level playing field for global firms," Mr. Sheets said. He also said the Financial Stability Board, the international organization aimed at promoting financial stability, is coordinating with member countries on central counterparties "so that these crucial parts of the financial architecture are not themselves too big to fail."

Further, he said, another priority is promoting financial inclusion by lowering the costs and improving regulation of international money transfers, or remittances.

Beyond that, he said, the Treasury is emphasizing financial education and transparency along with greater disclosure "particularly for those services designed to reach traditionally excluded and underserved groups," and, to that end, is working with international standards bodies.

Mr. Sheets also gave credit to regulators for developing standards to avoid the "too big to fail" problem with financial institutions. Known as total loss-absorbing capacity, or TLAC, the standards require banks to increase their capital reserves and will be phased in beginning in 2019.

"Analysis concludes that there will be sufficient demand for the TLAC instruments that must be issued to satisfy the standard," he said. "That said, the standard recognizes that emerging market G-SIBs (global systemically important banks) may need additional time to come into compliance due to their less developed domestic bond markets."

Write to Rachel Witkowski at Rachel.Witkowski@wsj.com

(END) Dow Jones Newswires

March 07, 2016 13:35 ET (18:35 GMT)

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