This letter from the FSB Chair, Randal K. Quarles, was sent to G20 Leaders ahead of their October Summit.

The letter notes that the Rome Summit is taking place amid signs of the global economy recovering from the impact of COVID 19 and related containment measures (the COVID Event). At the same time, the global financial system confronts significant structural challenges. These include rapid technological innovations within the traditional financial sector as well as outside, such as in the form of various crypto-assets. They also include a growing focus on potential risks to financial stability from climate change, whether from severe weather events or from uncertainties related to policy actions by governments.

The letter notes that, during the Italian G20 Presidency, the FSB has continued to support policymakers in preserving financial stability during the COVID Event and laying the foundation for a more efficient and resilient financial system in the future. The FSB has done this in two key ways. First, by setting out lessons for financial stability made apparent by the COVID Event, which define a path forward for the G20 on financial stability policy. Second, the FSB has been coordinating international work on key structural issues, not least through the FSB roadmap to address climate-related financial risks and by taking forward the roadmap to enhance cross-border payments.

The letter outlines some key lessons learnt from the COVID Event, including that international cooperation through the G20 has made an important contribution to global financial stability. The letter stresses the need to assess the financial stability implications of financial, and particularly, technological innovation, and to ensure that supervisory and regulatory frameworks and approaches provide a solid foundation for harnessing the benefits of such innovation while containing their risks.

The FSB has been charting a path forward for its work by developing, as a top priority, a more systematic way of assessing vulnerabilities across the global financial system, through a new Financial Stability Surveillance Framework. The FSB has sought to increase input from a broad range of stakeholders, enhancing its transparency and expanding its outreach. Building on these strengths, the FSB is developing its workplan for 2022 in concert with the incoming G20 Indonesian Presidency to build a cohesive path forward.