The policy framework aimed to mitigate the potential systemic risks associated with non-bank financial intermediation (NBFI) and comprised policies to:

  • mitigate spillovers between banks and the NBFI sector;

  • reduce the susceptibility of money market funds (MMFs) to runs;

  • align incentives associated with securitisation;

  • dampen financial stability risks and pro-cyclical incentives associated with securities financing transactions (SFTs); and

  • mitigate systemic risks posed by other non-bank entities and activities.

This report describes progress in implementing reforms in the above areas. It finds that:

  • Jurisdictions have made progress in implementing Basel III reforms to mitigate spillovers between banks and non-bank financial entities, but implementation is not yet complete.

  • Adoption of the 2012 International Organization of Securities Commissions (IOSCO) recommendations to reduce the run risk of money market funds (MMFs) is most advanced in the largest MMF markets.

  • Adoption of the IOSCO recommendations on incentive alignment approaches for securitisation and of the Basel Committee on Banking Supervision standard on the revised securitisation framework is ongoing.

  • Implementation of FSB recommendations for dampening procyclicality and other financial stability risks associated with SFTs is incomplete and continues to face significant delays in most jurisdictions.

  • Implementation of most FSB recommendations to assess and mitigate systemic risks posed by other non-bank financial entities and activities is ongoing.

In addition to these reforms, the FSB is carrying out further analytical and policy work to enhance the resilience of the NBFI sector, building on the lessons from the March 2020 market turmoil. Progress in the implementation of new agreed NBFI policies will be reported in future versions of this report.