Financial Stability Board Publishes 2022 Work Priorities

The Financial Stability Board has published a letter to G20 Finance Ministers and Central Bank Governors outlining its work priorities for 2022, which are:
 

• Supporting financial market adjustment to a post-COVID-19 world: the FSB observes vulnerabilities in the financial system, such as embedded leverage in some parts of the system and rising real estate and other asset valuations, which could pose risks to stability in the event of tightening financial conditions. Uneven unwinding of pandemic support measures is also a risk and the FSB will prepare an interim report in July and final report in October on policy considerations to support a more even global pandemic recovery.
• Reinforcing financial system resilience in light of the COVID-19 experience: the pandemic highlighted the need to enhance the resilience of the non-bank financial intermediation sector. The FSB plans to publish a report on cross-border US dollar funding and vulnerabilities in emerging market economies in April and will continue with its NBFI work program, which it began in 2020, and will include assessing the effectiveness of the FSB's recommendations on liquidity mismatch in open-ended funds and developing a systemic approach to NBFI.
• Harnessing the benefits of digitalization while containing its risks: the FSB will deliver a progress report in October on its work to enhance cross-border payments which should result in cheaper, faster and more transparent payment services. Rapidly growing crypto-asset markets are also a key area of concern for the FSB – in October it will deliver a report on its review of the recommendations made in its 2020 Global Stablecoin Report and a separate report on its proposals for best practices in regulatory cyber incident reporting requirements.
• Addressing financial risks from climate change: the FSB's work in 2022 will contribute to the four pillars of its 2020 roadmap for addressing climate-related financial risks – namely disclosures, data, vulnerabilities analysis and regulatory and supervisory approaches. It will deliver a report in October on the progress of its initiatives in this regard.

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