While the outcome of Brexit will have the biggest impact on the U.K. and EU markets, there will be some effects on the global economy, writes IIAC’s president and CEO in an industry letter.

“There is a need for an overarching structure to promote regulatory cooperation for efficient cross-border capital flows,” Ian Russell writes. “The Financial Stability Board (FSB) may be the best possible vehicle to take on responsibility for a regional or global collaborative framework for regulatory coordination of rules and mechanisms.”

He compares the FSB to the Bank for International Settlements (BIS), noting neither has authority over an individual jurisdiction.

“Yet the BIS has demonstrated over the years strong and effective influence coordinating capital and liquidity standards for the global banking system. Perhaps a similar influence can be wielded in securities regulation.”

For this to happen, however, the FSB would need to work closely with individual securities regulators and their governments, Russell says. He suggests the FSB could start with larger jurisdictions, like the EU and U.K., “to define a mandate and structure for regulatory coordination.”

The recommendations of the 2015 IOSCO Task Force on Cross-Border Regulation are an effective place to start, he notes.

Further, Russell writes, the Brexit process was “mishandled from the start” and “negotiations will go down to the wire” with an outcome that’s difficult to predict.

Notes Russell, “The U.K. has failed to define its core objectives and its negotiating strategy. Moreover, the governing coalition, the Conservative Party, with its mix of Remain MPs and Brexiteers, has complicated formation and execution of strategy.”

Read the full letter.

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