The Financial Stability Board (FSB) published a letter from its chair, Andrew Bailey, about the importance of global standards and cooperation, not just to prevent crises, but also as a foundation to support sustainable growth.
Preliminary results from the G20 strategic review of the FSB implementation monitoring work show that full, timely and consistent implementation of G20/FSB reforms has not been completely achieved, despite the active program of implementation monitoring by the FSB and standard-setting bodies. Significant inconsistencies in the implementation of global financial reforms can pose risks to market efficiency, financial stability and the integrity of the global regulatory framework.
The next phase of the G20 strategic implementation monitoring review will reflect on why implementation gaps exist and make specific recommendations to strengthen the FSB’s monitoring and implementation processes.
The rapid evolution of the financial sector, coupled with the uncertain economic and political outlook, calls for enhanced surveillance. The adoption of artificial intelligence in the financial sector or the increasing use of stablecoins for payment and settlement purposes, for example, put a premium on the monitoring of emerging risks.
To address this, the FSB will enhance its surveillance capabilities by improving its agility to recognize and respond to emerging vulnerabilities and strengthening engagement with stakeholders, including the private sector. The FSB will also improve the communication of its assessments, to enable public and private sector stakeholders to better mitigate risks.