Chair’s letter to the G20 Finance Ministers and Central Bank Governors
This letter from the FSB Chair to the G20 Finance Ministers and Central Bank Governors in advance of their meeting in Chengdu from 23-24 July highlights that thus far this year, the global economy and financial system have weathered two spikes in uncertainty and risk aversion. In both cases, the global financial system continued to function effectively, and the financial system dampened aftershocks from these events rather than amplifying them. This resilience in the face of stress demonstrates the enduring benefits of G20 post-crisis reforms. It also reinforces the importance of finishing the job of implementing these reforms.
Going forward, the collective goal should be to build an open, global financial system which supports sustainable cross-border investment. Such a financial system will reinforce other elements of the G20 agenda by supporting the long-term and infrastructure investments that will benefit all.
To this end, the FSB’s priorities for 2016 continue to be:
- Promoting a coordinated programme of reforms to deliver resilient sources of market-based finance, including addressing structural vulnerabilities associated with asset management activities;
- Developing robust financial market infrastructure, including assessing policies on central counterparty resilience, recovery and resolvability, and recommending any necessary improvements; and
- Supporting effective macroprudential arrangements, by drawing lessons from national experiences of the practical application of macroprudential policy frameworks and tools working in partnership with the IMF and BIS.
Alongside these current priorities, the FSB is also:
- Pursuing the full and consistent implementation of post-crisis reforms, while addressing material unintended consequences;
- Addressing new and emerging vulnerabilities in the financial system, including those associated with conduct, correspondent banking and climate change; and
- Monitoring the potentially systemic implications of financial technology innovations, and the systemic risks arising from operational disruptions.
This letter outlines the progress the FSB is making in advancing these and other goals ahead of the Hangzhou Summit of the Chinese G20 Presidency.