FSB issues statements to support a smooth transition away from LIBOR by end 2021

Press enquiries:
+41 61 280 8477
[email protected]
Ref no: 13/2021

The Financial Stability Board (FSB) has today published a set of documents to support a smooth transition away from LIBOR by the end of 2021. On 5 March 2021, ICE Benchmark Administration (IBA) and the UK Financial Conduct Authority (FCA) formally confirmed the dates that panel bank submissions for all LIBOR settings will cease, after which representative LIBOR rates will no longer be available. The majority of LIBOR panels will cease at the end of this year, although a number of key US dollar (USD) settings will continue until end-June 2023, to support the rundown of legacy contracts only.

In light of these developments, and to facilitate an orderly transition by end-2021, the FSB has published the following statements and reports that set out recommendations for financial and non-financial sector firms, as well as the authorities, to consider:

  • An updated global transition roadmap that, drawing on national working group recommendations, summarises the high-level steps firms will need to take now and over the course of 2021 to complete their transition.

  • A paper reviewing overnight risk-free rates and term rates, building on the concept that the tools necessary to complete the transition are currently available. The FSB cautions market participants against waiting for the development of additional tools, in particular forward-looking term risk-free rates.

  • A statement on the use of the ISDA spread adjustments in cash products, to support transition particularly in loan markets, which remains an area of concern with much new lending still linked to LIBOR.

  • A statement encouraging authorities to set globally consistent expectations that regulated entities should cease the new use of USD LIBOR in line with the relevant timelines for that currency, regardless of where those trades are booked.

The FSB also welcomes the statement on benchmarks transition published today by the International Organization of Securities Commissions, which reiterates the importance of ensuring a smooth and timely transition away from LIBOR.

Given the limited time available until the end of 2021, the FSB strongly urges market participants to act now to complete the steps set out in its global transition roadmap.

The FSB plans to produce its next full report on progress in November 2021.

Notes to editors

The FSB set out in 2014 a series of recommendations for strengthening key interbank offered rates (IBORs) in the unsecured lending markets, and for promoting the development and adoption of alternative nearly risk-free reference rates, where appropriate. The FSB and member authorities, through the FSB Official Sector Steering Group (OSSG) chaired by Andrew Bailey (Governor, Bank of England) and John C. Williams (President and CEO, Federal Reserve Bank of New York), are working to implement and monitor these recommendations. The FSB published its most recent annual progress report on implementation of the recommendations in November 2020.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman, US Federal Reserve; its Vice Chair is Klaas Knot, President of De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

Targets for Addressing the Four Challenges of Cross-Border Payments: Consultative document

31 May 2021 | PDF full text (319 KB)

A foundational step in the G20 Roadmap for Enhancing Cross-border Payments consists of setting quantitative global targets for addressing the challenges of cost, speed, transparency and access faced by cross-border payments.

Summary of document history

Summary of document history

A foundational step in the G20 Roadmap for Enhancing Cross-border Payments consists of setting quantitative global targets for addressing the challenges of cost, speed, transparency and access faced by cross-border payments.

This consultation sets out quantitative targets for addressing the challenges of cost, speed, transparency and access faced by cross-border payments.

The targets are a foundational step in the G20 Roadmap for Enhancing Cross-border Payments. Faster, cheaper, more transparent and more inclusive cross-border payment services, including remittances, while maintaining their safety and security, would have widespread benefits for citizens and economies worldwide, supporting economic growth, international trade, global development and financial inclusion. The targets will be set at a global level and will play an important role in defining the ambition of the work on enhancing cross-border payments and creating accountability. They will act as a commitment mechanism to drive change. These targets will therefore need to be monitored and publicly reported on over time.

The consultation:

  • describes the principles, and key design features underpinning, the targets and target metrics;

  • proposes three market segments (wholesale, retail and remittances) for which targets will be set across the four challenges;

  • considers factors in setting the targets; and

  • proposes a small number of high-level, simple targets that are focused on end-users

Responses to this consultative document should be sent to [email protected] by Friday 16 July 2021. Responses will be published on the FSB’s website unless respondents expressly request otherwise. The final recommendations, taking on board feedback from the public consultation, will be delivered for endorsement at the G20 Summit in October 2021 and published.

FSB seeks feedback on its proposals for quantitative targets for enhancing cross-border payments

Press enquiries:
+41 61 280 8477
[email protected]
Ref no: 12/2021

The Financial Stability Board (FSB) today published a public consultation on global targets for addressing the four challenges of cross-border payments. The quantitative targets proposed are a foundational step in the G20 Roadmap for Enhancing Cross-border Payments, which was endorsed by G20 Leaders in November 2020.

The proposed targets set goals for improving cost, speed, transparency and access for cross-border payments in the coming years through the actions taken under the Roadmap. They will play an important role in defining the ambition of the work and creating accountability. They are intended to provide a common vision for the improvements that are being sought in cross-border payments services through the collaborative work of the private and public sectors. These targets are being set in an inclusive manner, including through this public consultation.

The proposed targets have been developed so that they are directly related to the challenges, provide a clear indication of the extent of progress, are appropriately ambitious, can be readily communicated, and are meaningful to a wide range of stakeholders. They are designed to be a small number of high-level, simple targets focused on end-users. Targets are proposed across three market segments: wholesale payments; retail payments (involving non-financial corporates or public sector entities as payers or receivers and person-to-person (P2P) payments other than remittances); and remittances.

The FSB proposes end-2027 as a common target date for achieving the individual targets, with the exception of the remittance cost target, where a 2030 date has already been set within the United Nations Sustainable Development Group Goal (UN SDG) and endorsed by the G20. Progress towards meeting the targets will be monitored and publicly reported over time.

The FSB is inviting comments on the proposed targets and the questions set out. By the time of the October final report setting the targets, the FSB will also develop an implementation approach for monitoring the targets that will set out:

  1. how targets will be measured and data sources and data gaps to be filled;

  2. how progress towards meeting the targets will be monitored; and

  3. the frequency of data collection and publication.

The public consultation period closes on Friday 16 July 2021. The final recommendations, taking on board feedback from the public consultation, will be delivered for endorsement at the G20 Summit in October 2021 and published.

Notes to editors

The G20 has made enhancing cross-border payments a priority. The FSB published the Roadmap for Enhancing Cross-border Payments in the form of 19 Building Blocks and related Actions. The Roadmap was developed by the FSB, in coordination with the Committee on Payments and Market Infrastructures (CPMI) and other relevant international organisations and standard-setting bodies.

The FSB established the Cross-border Payments Coordination Group Task Force on Targets, composed of senior FSB representatives, to develop a proposal for specific quantitative targets including target dates for a public consultation to be launched in May 2021.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman, US Federal Reserve; its Vice Chair is Klaas Knot, President of De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

FSB Europe group discusses global vulnerabilities and addressing risks related to money market funds and climate change

27 May 2021

Press enquiries:
+41 61 280 8477
[email protected]
Ref no: 11/2021

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for Europe held a virtual meeting yesterday to discuss global and regional macroeconomic and financial market developments, and their potential impact on European economies.

The group exchanged views on financial stability issues during the recovery from the COVID-19 pandemic, including potential threats to regional financial stability arising from the pandemic. Members also discussed authorities’ considerations in exiting from temporary public support measures, when conditions allow.

The group discussed the most recent FSB initiatives to address climate-related risks to financial stability, including promoting consistent regulatory and supervisory approaches to climate risk and identifying gaps in data for monitoring financial stability. Members also discussed promoting greater uptake and consistency in national and regional climate-related disclosures, using the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations as the basis with respect to climate-related financial risks. Members were informed of the FSB’s ongoing work to develop a coordinated roadmap to address climate-related financial risks, which will be submitted to the G20 and published in July.

Members exchanged views on how to strengthen the resilience of money market funds (MMFs) and discussed the FSB’s policy work on assessing and addressing vulnerabilities in MMFs which is a part of the FSB’s overall work programme to strengthen the resilience of non-bank financial intermediation. Given the cross-border nature of MMFs, members discussed the best ways to coordinate regarding reforms to MMFs. Members were informed about the FSB’s upcoming public consultation on policy options for MMFs to be published ahead of the July G20 meetings.

The group also received an update on the FSB’s work programme, including planned deliverables to the G20 in 2021.

Notes to editors

The FSB RCG for Europe is co-chaired by Katharine Braddick, Director General, Financial Services at the UK Treasury and Henry Ohlsson, Deputy Governor, Sveriges Riksbank. Membership includes financial authorities from Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Ukraine, United Kingdom and the Group of International Finance Centre Supervisors. The European Commission, the European Central Bank, the ECB Banking Supervision and European Banking Authority also attended the meeting.

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 25 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman, US Federal Reserve Board; its Vice Chair is Klaas Knot, President of De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and sub-Saharan Africa. [←]

Application Paper on the Supervision of Climate-related Risks in the Insurance Sector

25 May 2021

View the Standard

The Paper provides insurance supervisors with concrete tools to further strengthen their efforts in assessing and addressing risks to the insurance sector from climate change. It also sets out recommendations and examples of good practice, consistent with the Insurance Core Principles (ICPs). With this publication, the IAIS and SIF aim to promote a globally consistent approach to the supervision of climate-related risks.

The Paper provides recommendations on the following topics:

  • Role of the supervisor: Supervisors should assess the relevance of climate-related risks to their supervisory objectives. They should collect quantitative and qualitative information on the insurance sector’s exposure to, and management of, physical, transition and liability risks of climate change.

  • Corporate governance: When addressing climate-related risks, it is expected that insurers integrate these risks into their overall corporate governance framework. For instance, the control functions (including the risk management and actuarial functions) should properly consider climate-related risks and have appropriate resources and expertise to manage them.

  • Risk management: Climate-related risks have the potential to impact all insurers; therefore, these risks should be considered for inclusion in the Own Risk and Solvency Assessment (ORSA). Likewise, it is expected that insurers adopt the appropriate risk management actions to mitigate any identified risks

  • Investment policy: Insurers should assess the impact from physical and transition risks on their investment portfolio, as well as on their asset-liability management. A forward-looking view, including the use of scenarios, may help insurers gain a better understanding of the risks.

  • Disclosures: Material risks associated with climate change should be disclosed by insurers, in line with ICP 20 (Public Disclosure).

FSB Commonwealth of Independent States (CIS) group discusses risks to financial stability

20 May 2021

Press enquiries:
+41 61 280 8477
[email protected]
Ref no: 10/2021

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Commonwealth of Independent States (CIS) held a virtual meeting today.

Members had a productive discussion on a range of financial stability issues including:

  • The effects of COVID-19 and temporary support measures adopted by advanced economies on RCG CIS members’ economies.

  • The effectiveness of RCG CIS members’ respective support measures as well as the challenges in developing an exit strategy from these temporary measures when conditions allow.

  • Strategies for dealing with Environmental, Social and Governance (ESG) risks, including in assessing their impact on financial stability.

  • The potential adoption of national digital currencies, in both developed and emerging market economies, and their impact on financial stability.

  • The progress in phasing out of LIBOR and replacing it with alternative financial benchmarks.

The group also received an update on the FSB’s work programme, including planned deliverables to the G20 in 2021, and discussed how RCG CIS members could engage further with the FSB on areas of particular importance.

Notes to editors

The FSB RCG for the CIS is co-chaired by Alexey Moiseev, Deputy Finance Minister of the Russian Federation and Nerses Yeritsyan, Deputy Governor, Central Bank of Armenia. Membership of the RCG CIS comprises financial authorities from Armenia, Belarus, Kazakhstan, Kyrgyz Republic, Russia and Tajikistan.

This is the ninth meeting of the RCG for the CIS. The last meeting of the group was held on 11 December 2018 in Yerevan, Armenia.

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 25 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman, US Federal Reserve Board; its Vice Chair is Klaas Knot, President of De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and sub-Saharan Africa. [←]

FSB Asia group discusses risks to financial stability and regulatory and supervisory challenges arising from COVID-19

18 May 2021

Press enquiries:
+41 61 280 8477
[email protected]
Ref no: 9/2021

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for Asia held a virtual meeting today to discuss vulnerabilities and financial stability issues affecting Asia and the impact of the COVID-19 pandemic on the region.

Members discussed global and regional macroeconomic and financial market developments, including risks to financial stability arising from the COVID-19 pandemic and the challenges in managing the recovery in an environment where an uneven pace of recovery across regions could have spillover effects to Asia. Members exchanged views on some of the preliminary lessons learnt from the pandemic, as well as the impact of the pandemic and ensuing policy support measures on corporate viability and debt servicing.

The group also discussed regulatory and supervisory challenges arising from the pandemic. Members acknowledged that the effective implementation of global standards had played a key role in supporting the strong starting positions of financial institutions going into this crisis. At the same time, many members have made or are considering adjustments to regulatory and supervisory approaches, such as stress testing methodologies, to safeguard financial system resilience.

The group received an update on the FSB’s work programme and the planned deliverables to the G20 in 2021. Members discussed areas of importance for RCG Asia member jurisdictions, such as the FSB’s work on US dollar funding and emerging market and developing economy vulnerabilities, and agreed the need for further engagement on this.

Notes to editors

The FSB RCG for Asia meeting was co-chaired by Benjamin E. Diokno, Governor, Bangko Sentral ng Pilipinas and M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India. Membership of the RCG for Asia comprises financial authorities from Australia, Brunei Darussalam, Cambodia, China, Hong Kong SAR, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Thailand and Vietnam.

In preparation for the meeting, Governor Benjamin E. Diokno convened an informal meeting among non-FSB members of the RCG for Asia, to discuss evolving financial stability issues in the region.

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 25 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman, US Federal Reserve Board; its Vice Chair is Klaas Knot, President of De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and sub-Saharan Africa. [←]

FSB Americas group discusses global and regional vulnerabilities and COVID-19 support measures

4 May 2021

Press enquiries:
+41 61 280 8477
[email protected]
Ref no: 8/2021

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Americas held a virtual meeting today to discuss global and regional macroeconomic and financial market vulnerabilities and their potential impact on the region. Members discussed possible financial stability implications from the COVID-19 pandemic, including the impact of a more asynchronous recovery across regions and capital flows on emerging market and developing economies (EMDEs).

Members exchanged views on preliminary lessons learnt from COVID-19 and the effectiveness of policy support measures, in particular, potential spillover effects to EMDEs from policy measures taken by advanced economies. Members also discussed the implications of adjustments in, and the eventual withdrawal of, support measures once appropriate and their impact on cross-border banking, capital flows, and corporate sector debt.

The group received an update on the FSB’s work programme, including planned deliverables to the Italian G20 Presidency in 2021. Members discussed areas of importance for RCG Americas member jurisdictions, including work underway in the FSB to strengthen the resilience of non-bank financial intermediation; the FSB Roadmap for enhancing cross-border payments; transitioning away from LIBOR; strengthening cyber and operational resilience; and analysing and addressing climate-related financial risks.

Notes to editors

The FSB RCG for the Americas is co-chaired by Alejandro Díaz de León-Carrillo, Governor, Bank of Mexico and Cindy Scotland, Managing Director, Cayman Islands Monetary Authority. Membership includes financial authorities from Argentina, Bahamas, Barbados, Bermuda, Bolivia, Brazil, British Virgin Islands, Canada, Cayman Islands, Chile, Colombia, Costa Rica, Guatemala, Honduras, Jamaica, Mexico, Panama, Paraguay, Peru, Trinidad and Tobago, the United States of America and Uruguay.

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability1. Typically, each Regional Consultative Group meets twice each year.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Randal K. Quarles, Vice Chairman, US Federal Reserve Board; its Vice Chair is Klaas Knot, President of De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and sub-Saharan Africa. [←]