Abstract
We explore the factors that shape the response of G20 countries to a Financial Stability Board (FSB) recommendation aimed at mitigating the risks from financial innovation. Using the FSB's Implementation Monitoring Network Surveys, we develop an index of disclosed strength of regulatory response. We find that G20 countries have displayed large interpretive differences, little forward planning and have emphasized regulatory capabilities over firm capabilities when addressing the recommendation. Countries with strong central banks, more concentrated regulatory structures and bank-based financial systems responded more robustly, while countries with a large financial sector were marginally associated with a weaker response