Financial Stability Board Highlights Vulnerabilities in Global Financial System

The Financial Stability Board has written to G20 Finance Ministers and Central Bank Governors outlining the key focus areas for the FSB’s work ahead of the next G20 summit in Saudi Arabia in November 2020. The communication builds on certain areas highlighted as priorities in the FSB’s 2020 Work Program, published in December 2019. The FSB intends to focus on the following:
 

• LIBOR – speculation that LIBOR will continue indefinitely, notwithstanding repeated warnings of the risks related to its upcoming cessation by public sector bodies, has led the FSB to commence a survey (together with the Basel Committee on Banking Supervision) on LIBOR transition progress in over 50 jurisdictions; the FSB will deliver a report on LIBOR-related supervisory measures to the July G20 meeting;
• Technology – in July 2020, the FSB plans to follow up on its 2019 BigTech report on the implications of financial technology for emerging markets and to submit a report on the use of technology in regulation and supervision; it also intends to deliver its toolkit of practices for dealing with a cyber incident in April for public consultation;
• Stablecoins – the FSB plans to issue a draft report on the regulatory and supervisory approaches to stablecoins for public consultation in April 2020; it has also produced a work plan for improving cross-border payment systems, which will be followed by an FSB roadmap in October 2020 setting out practical steps and an indicative timeframe for implementation of improvements; and
• Non-bank financial intermediation – the FSB is establishing a group, comprised of the FSB Standing Committee chairs and other representatives of institutions with authority over NBFIs, to consider whether existing work on NBFIs is appropriate.

The FSB also intends to finalize its surveillance framework for identifying new risks to financial stability in the second half of 2020 and to deliver a progress report on practical steps that can be taken to enhance global supervisory and regulatory coordination. As part of its review of post-crisis reforms, the FSB will also publish a public consultation in June 2020 on the impact of the too-big-to-fail reforms, with a final report to be delivered at the November 2020 G20 meeting.

View the FSB's communication to G20 ministers and central banks.

View details of the FSB's 2020 Work Program.

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