Members discussed global and regional financial vulnerabilities, including the challenges posed by subdued economic growth in Europe, a persistent search for yield and continued pressures on the profitability of European banks.
The group discussed the wide range of regulatory and supervisory issues raised by stablecoins of potentially global reach, and looked forward to the public consultation report on regulatory issues of stablecoins to be published by the FSB in April 2020. Members also discussed current shortcomings of cross-border payment systems and how these might be addressed.
Members then discussed reform of major interest rate benchmarks. The group underlined the importance of financial institutions being prepared for the possible end of LIBOR once official sector support for the benchmark is withdrawn at end-2021, and changes to other benchmarks. They noted that authorities remain committed to these transitions and expect firms to take appropriate steps to ensure smooth transitions. They discussed the findings of the progress report the FSB will publish on benchmark reform next month.
Members received an update on the FSB’s ongoing work and its plans for 2020 which were discussed at the FSB Plenary last week. As part of this update, RCG members received an update on the FSB’s ongoing evaluation of too-big-to-fail reforms for systemically important banks.
The group discussed a joint financial crisis management exercise that had been conducted by Nordic and Baltic authorities in January 2019 to test their preparedness for a financial crisis. Members that participated in the simulation set out the lessons learnt and actions they are taking to address issues highlighted by the exercise.
Full press release on FSB
© FSB - Financial Stability Board
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