FSB publishes annual report on its work to promote global financial stability
16 November 2022
The report warns that the outlook for global financial stability is particularly challenging amidst high inflationary pressures, elevated debt levels, lower growth, and much tighter global financial conditions.
The Financial Stability Board (FSB) today published its latest Annual Report.
The report, which was delivered to the G20 Leaders ahead of their Bali
Summit, describes the FSB’s work to promote global financial stability.
The report, which was delivered to the G20 Leaders ahead of their
Bali Summit, describes the FSB’s work to promote global financial
stability.
The report warns that the outlook for global financial stability
is particularly challenging amidst high inflationary pressures,
elevated debt levels, lower growth, and much tighter global financial
conditions. So far global financial markets have proved to be resilient.
However, many authorities have limited policy space to intervene should
a shock materialise. This amplifies the need to remain vigilant and
take policy measures to maintain the resilience of the financial system.
Market turbulence could be amplified by still elevated valuations of
some assets, forced sales from sudden unwinding of leveraged positions
of non-bank financial institutions, and liquidity mismatches in some
types of funds. Debt servicing pressures may surface across the
sovereign, non-financial corporate and household sectors The FSB has
also intensified monitoring of vulnerabilities and has continued support
of international cooperation and coordination in the aftermath of
COVID-19 and Russia’s invasion of Ukraine.
The report highlights the analytical and policy work the FSB
is carrying out to tackle current and emerging vulnerabilities. This
includes, amongst others, work to enhance: the resilience of non-bank
financial intermediation; the reporting and sharing of information
related to cyber incidents; and to achieve internationally consistent
and comprehensive regulation of crypto-asset activities and markets.
The report finds that progress in implementing G20 reforms
continues but remains uneven. Jurisdictions’ adoption of Basel III
continues, though there is uneven progress in implementing the final
reforms to the capital framework. Implementation of OTC derivatives
reforms is well advanced but further progress continues to be
incremental. Work is still ongoing to close gaps in the
operationalisation of banks’ resolution plans and to implement effective
resolution regimes for insurers and central counterparties.
The report emphasises that, in the face of the current challenges for
financial stability, timely and consistent implementation of G20
reforms remain as relevant as when they were initially agreed. The FSB
and standard-setting bodies will continue to promote approaches to
deepen international cooperation, coordination and information-sharing.
FSB
© FSB - Financial Stability Board
