FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: October 2020
The letter notes the extraordinary challenges for the global financial system this year. The FSB will provide a comprehensive report on the financial stability implications of, and policy responses to, the COVID Event to the November G20 Summit, including a holistic review of the market turmoil in March. The holistic review will inform future steps of the FSB in 2021 under the Italian G20 Presidency to improve the resiliency of the NBFI sector while preserving its benefits.
Meanwhile, the FSB has not lost sight of important ongoing work in financial innovation, payments systems, cyber resilience, and market fragmentation. The FSB is submitting to the G20 work addressing issues at the frontier of financial innovation and technology, including:
a toolkit of effective practices that the FSBencourages regulators and financial institutions to use to respond to and recover from the negative impacts of a cyber incident;
an examination ofthe impact that BigTech firms have on emerging market and developing economies;
an assessment ofhow SupTech and RegTech technologies may improve authorities’ supervisory capabilities and institutions’ regulatory compliance; and
high-level recommendations for regulatory, supervisory, and oversight responsesto so-called “stablecoin” instruments, by applying the lens of ‘same activity – same risk – same rules’.
This work aims to provide the regulatory community with additional tools to quickly assess and mitigate the risks posed by such changes without tempering the benefits. It also reflects the fundamental role international coordination plays in creating a resilient financial system that seeks to avoid harmful market fragmentation.
The letter also describes the FSB’s high-level roadmap for developing cross-border payment systems and processes that are faster, more inclusive, less expensive, and more transparent. While the actions that form the overall roadmap are ambitious they are achievable with the continued support from the G20.
In addition, the FSB continues is working on a variety of fronts to promote a resilient and integrated global financial system. The financial stability implications of climate-related risks remain a topic of great interest for the FSB’s membership and the international community. In addition, the FSB continues with other global standard-setting bodies in efforts to address market fragmentation.