|
|
The Financial Stability Board (FSB) today published a letter from its Chair, Klaas Knot, to G20 Finance Ministers and Central Bank Governors, ahead of the G20 meeting on 24‑25 February.
The letter notes the recent easing in global financial conditions but warns that, while expectations of a ‘soft landing’ for the global economy have grown, the outlook remains clouded by uncertainty. The combination of near record-high levels of debt, rising debt service costs and stretched asset valuations in some key markets could pose serious threats to financial stability. The letter lays out the FSB’s work during 2023 to monitor and address these vulnerabilities and introduces three reports the FSB is delivering to this meeting on:
Many of the vulnerabilities and channels of contagion analysed in the report are being addressed in the FSB’s work programme to enhance the resilience of NBFI. Additional priorities, outlined in the letter, include an in-depth study of forms of non-bank leverage that are not always apparent in supervisory and regulatory data; policy work to address liquidity mismatch in open-ended funds; work to enhance market participants’ liquidity preparedness for margin and collateral calls and to identify data gaps in regulatory reporting; and a peer review of money market fund policy reform measures.
The FSB will finalise by July this year its recommendations for the regulation, supervision and oversight of crypto-assets and markets and its recommendations targeted at global stablecoin arrangements. The FSB will also continue to conduct forward-looking analysis to assess the implications of crypto-assets for financial stability, including an in-depth examination of the large crypto-asset intermediaries that provide a wide range of services to the ecosystem; and analysis of the increasing trend toward the tokenisation of assets and how that could affect financial stability.