Shearman & Sterling LLP | FinReg | Financial Stability Board Publishes Letter to G20 Ministers on Effect of Reforms and Future Work
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  • Financial Stability Board Publishes Letter to G20 Ministers on Effect of Reforms and Future Work

    The Financial Stability Board has published a letter to G20 Finance Ministers and Central Bank Governors describing the progress of post-financial crisis reforms and key focus areas for the future. Over the past ten years, the FSB has proposed a number of reforms to the global financial system, working with international organizations on implementation to improve financial stability.
    The letter notes that the FSB’s reforms have helped to accomplish a stronger banking system that holds more loss-absorbing capital and higher liquidity levels, more transparent derivatives markets and less complex securitizations. However, the letter also identifies risks for the future, including:
    • the leveraged loans and collateralized loan obligations markets, which have grown significantly in recent years; the FSB plans to produce a study of these markets to be issued by the end of 2019;
    • global stablecoins that have the potential to become systemically important and therefore pose challenges for financial stability, consumer and investor protection, AML/CFT compliance and cyber security; the G7 working group on stablecoins is delivering a preliminary assessment of the opportunities and challenges of stablecoins and the FSB has also formed a working group to examine regulatory issues in this area; and
    • harmful market fragmentation, on which the FSB continues to collaborate with international standard-setters; the FSB is submitting a progress report to the G20 on its work to combat these risks.

    The FSB will publish its annual report on the implementation and effects of the G20 financial regulatory reforms on October 16, 2019.

    View the FSB's letter to G20 Ministers and Central Bank Governors.

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