Shearman & Sterling LLP | FinReg | Financial Stability Board Plenary Meets to Review Global Financial System Vulnerabilities, FinTech and its 2020 Work Program
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  • Financial Stability Board Plenary Meets to Review Global Financial System Vulnerabilities, FinTech and its 2020 Work Program
    11/07/2019
    The Financial Stability Board has met in Paris to review key issues facing financial markets, including vulnerabilities in the global financial system, FinTech developments and its 2020 work program. The key areas of discussion included:
     
    • Vulnerabilities in the global financial system: these include the impact over the long term that structural changes in the interest rate environment may have on financial stability, growing vulnerabilities associated with leveraged loans and collateralized loan obligations and the ability of banks in some jurisdictions to raise capital at a reasonable cost following negative economic or financial shocks;
    • FSB surveillance framework: the FSB’s surveillance framework will support a review of vulnerabilities by the FSB; it is hoped that the key parameters of the framework will be completed in mid-2020;
    • FinTech developments: developments in crypto-asset markets were discussed by the Plenary, with an endorsement of an augmented framework for monitoring financial stability risks to take account of stablecoin systems as well as a consideration of the broader regulatory and supervisory issues raised by stablecoins; the FSB plans to publish a consultative report on the regulatory issues surrounding stablecoins in April 2020;
    • Effects of financial reforms: the FSB plans to publish a consultation report on too-big-to-fail reforms for systemically important banks in June 2020 and intends to launch an evaluation into the effects of money market fund reforms in mid-2020; and
    • FSB work program: the main priorities of the FSB for 2020 are addressing new and emerging vulnerabilities in the financial system, finalizing and operationalizing post-crisis reforms and monitoring the implementation and evaluation of the effects of the reforms.
     
    View the FSB's Press Release on its Plenary discussions.
     
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