FSB Americas group discusses financial stability outlook and the implications of crypto-assets for financial stability

6 December 2021

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Ref: 40/2021

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Americas held a virtual meeting today to discuss recent global and regional macroeconomic and financial market developments and the outlook for the region.

Members exchanged views on possible financial stability implications from the COVID-19 pandemic and recovery, including implications for capital flows in emerging market and developing economies (EMDEs) due to divergent growth patterns across countries.  

Members also discussed the impact of rapidly evolving crypto-asset markets on financial systems in the region and their implications for financial stability. The group also shared experiences on the impact of the COVID-19 pandemic on accelerating digital innovation in the financial system and financial inclusion.

The group received an update on the FSB’s work programme, including planned deliverables to the G20 during the Indonesian Presidency in 2022. Members deliberated on areas of importance for RCG Americas member jurisdictions and how they could contribute to the FSB’s work programme.

Notes to editors

The FSB RCG for the Americas is currently chaired by Cindy Scotland, Managing Director of the 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, Uruguay and the United States of America.

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 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 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. [←]

RCG for the Americas: Non-Bank Financial Intermediation Monitoring – Sixth Report

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Since December 2012, the FSB Regional Consultative Group for the Americas has conducted a regional monitoring exercise of the non-bank financial intermediaries sector within its member jurisdictions.

This report presents the results of the sixth non-bank financial intermediation (NBFI) monitoring exercise in the Americas. The exercise assesses the size, structure and recent trends of the NBFI sector in the region. The impact of the COVID-19 underlined the importance of this information in identifying potential risks to financial stability at the jurisdiction level, as well as those arising from potential cross-border linkages.

The report concludes that total financial assets in the region reached over $140trn at end-2019, with growth of 10.1% during 2019, faster than the annualised growth of 3.6% for the period between 2013 and 2018 and contrasting with the negligible annual contraction of 0.2% registered during 2018. The growth in total assets in 2019 was largely driven by the largest jurisdiction (United States), but growth was positive also in most other jurisdictions in the region.

The narrow measure, which covers NBFI activities that may pose bank-like financial stability risks, reached $27.7trn at end-2019, up from $24.4trn at end-2018, a faster growth rate (13.7%) than that observed in previous years (the compound growth rate for the 2013- 2018 period was 3.7%). Within the narrow measure, the fastest growth was in collective investment vehicles with features that make them susceptible to runs, which grew by 17.1% in 2019 and made up 76.2% of the narrow measure at end-2019.

This document has been prepared by the FSB RCG for the Americas and is being published to disseminate information to the public. The views expressed in the document are those of the RCG for the Americas and do not necessarily reflect those of the FSB.

Composition of financial systems by sector (14 jurisdictions at end-2019)

Composition of financial systems by sector (14 jurisdictions at end-2019)

OTC Derivatives Market Reforms: Implementation progress in 2021

3 December 2021 | PDF full text (759 KB)

This report tracks international progress in finalising standards and national and regional progress in implementing the G20 reforms to global over-the-counter (OTC) derivatives markets reforms following the 2008 Global Financial Crisis.

Overall implementation of the G20’s OTC derivatives reforms was already well advanced by 2020, but there has been further incremental progress across FSB member jurisdictions since the previous annual report in October 2020.

  • Capital requirements for non-centrally cleared derivatives (NCCDs): 15 out of 24 FSB member jurisdictions have higher capital requirements for NCCDs (significantly up from 8 in 2020). More jurisdictions are expected to implement these requirements in 2022.
  • Margin requirements for NCCDs: The number of jurisdictions where margin requirements are in force remains unchanged at 16. Two jurisdictions published draft standards. Some jurisdictions that have yet to implement the requirements expect to do so before the final implementation phase takes effect on 1 September 2022.
  • Trade reporting: The number of FSB jurisdictions where trade reporting requirements are in force remains unchanged at 23. In the remaining one jurisdiction, preparations for authorising a trade repository and implementing the jurisdiction’s requirements are ongoing. Some jurisdictions report they have further strengthened the functioning of trade repositories and the reporting requirements.
  • Central clearing: 17 FSB member jurisdictions have in force central clearing requirements, unchanged since the 2020 report. Some jurisdictions are taking steps toward implementation of mandatory central clearing, including authorisation of a central counterparty (CCP) in the jurisdiction.
  • Platform trading: The number of jurisdictions with platform trading requirements in force remains unchanged at 13.
Number of FSB jurisdictions in final implementation phase

OTC Derivatives progress report 2021

Number of jurisdictions where legislation framework is in place and standards/requirements are in force for over 90% of transactions

The report also notes that most jurisdictions have withdrawn or have not extended measures previously introduced to alleviate the operational burden for OTC derivatives market participants in response to COVID-19. Changes to market and counterparty credit risk frameworks and margin practices to limit and mitigate excessive procyclicality have been embedded into jurisdictions’ supervisory frameworks.

FSB Middle East and North Africa group discusses financial stability outlook and climate-related financial risks

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Ref: 39/2021

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Middle East and North Africa (MENA) met today in virtual format.

Members discussed global and regional macro-financial vulnerabilities, including those stemming from the COVID-19 pandemic, their possible impact on RCG MENA member economies, and potential policy responses. As part of the discussion, members discussed initial lessons learnt from a financial stability perspective, and considered the potential implications for the region of exit measures taken in advanced economies.

Members also discussed the challenges in assessing climate-related financial risks and the implications of such risks for economies in the MENA region. Members exchanged views on policy priorities and regulatory and supervisory approaches for dealing with climate-related financial risks.

The group received an update on the FSB’s work programme for 2022, including deliverables to the Indonesian G20 Presidency, and discussed areas of particular relevance to the region where RCG MENA members could contribute their expertise.

Notes to editors

The FSB RCG for the Middle East and North Africa is co-chaired by Şahap Kavcıoğlu, Governor, the Central Bank of the Republic of Turkey and Marouane El Abassi, Governor, Central Bank of Tunisia. Membership includes financial authorities from Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates.

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 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. [←]

Klaas Knot takes office as FSB Chair

2 December 2021

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Ref: 38/2021

Klaas Knot today has taken office as Financial Stability Board (FSB) Chair, succeeding Randal K. Quarles.

Mr Knot is President of De Nederlandsche Bank (DNB). Prior to his appointment as Chair, Mr Knot had been serving as FSB Vice Chair and Chair of the FSB’s Standing Committee on Assessment of Vulnerabilities (SCAV).

FSB Plenary members, in their final meeting under Randal Quarles’ leadership on 18 November, expressed their gratitude to Randal Quarles for his leadership and commitment in chairing the FSB during the past three years, and looked forward to working with Klaas Knot.

Randal K. Quarles said “It has been an honor to serve as FSB Chair these last three years and to lead this important global organization during such a critical time. During the COVID Event, the FSB has proven its effectiveness as a mechanism to further global financial stability and support swift recovery. Our members, and the partnerships we have built, remain our greatest asset. As Klaas takes over from me, I know that I leave the FSB in safe hands.”

Klaas Knot added: “Under Randy’s leadership, the FSB demonstrated its vital role as a coordinating mechanism for financial authorities in the global response to COVID-19. I look forward to continuing the important work of the FSB at a time when the financial system is confronted by both structural changes and the need to provide financing to sustain a balanced economic recovery. The FSB, with its broad membership and diverse expertise, is uniquely placed to oversee further enhancements to the resilience and functioning of the financial system at this critical juncture.”

Notes to editors

Klaas Knot succeeds Randal K. Quarles (Governor, US Federal Reserve), whose term of office as FSB Chair ended on 1 December 2021. Klaas Knot’s term as FSB Chair runs from 2 December 2021 until 1 December 2024.

The decision to appoint Mr Knot as FSB Chair was made on 26 November 2018. At that time, the FSB Plenary appointed Randal K. Quarles as its new Chair and Klaas Knot as Vice Chair, for a three-year term starting on 2 December 2018, and also agreed that after three years on 2 December 2021 Mr Knot would take over as Chair for the next three-year term.

The FSB Chair is selected from representatives on the Plenary and appointed by the Plenary for a term of three years, renewable once. The process for appointing the FSB’s Chair is set out in the FSB’s Procedural Guidelines and the Charter.

Biography

Klaas H.W. Knot has been President of De Nederlandsche Bank (DNB) since July 2011 and was reappointed for a second seven-year term as President of DNB in July 2018. In his capacity as DNB President, he is a member of the Governing Council of the European Central Bank, Governor of the International Monetary Fund, and member of the Board of Directors of the Bank for International Settlements and of the European Systemic Risk Board. He became Chair of the FSB’s Standing Committee on the Assessment of Vulnerabilities in September 2018 and, in addition, Vice Chair of the FSB in December 2018.

In 1991, Mr Knot graduated with honours in economics at the University of Groningen. In 1995, he obtained his PhD in economics. He is honorary Professor of Economics of Central Banking at the University of Groningen and of Monetary Stability at the University of Amsterdam.

Prior to becoming President of DNB, Mr Knot was Deputy Treasurer-General and Director of Financial Markets at the Dutch Ministry of Finance. He also held positions at DNB, the Pension and Insurance Authority, and the International Monetary Fund.

The FSB

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 Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

FSB Sub-Saharan Africa group reviews regional vulnerabilities and policy challenges related to COVID-19

1 December 2021

Press enquiries:
+41 61 280 8477
[email protected]
Ref: 37/2021

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for Sub-Saharan Africa held a virtual meeting today to discuss recent global and regional macroeconomic and financial market developments and their implications for financial stability.

Members considered the lessons learned so far from the COVID-19 pandemic for their jurisdictions and policy challenges stemming from the recent crisis, including trade-offs between keeping in place measures to support the financing of the real economy and preserving policy space. The response to COVID-19 should be based on scientific evidence and the supply of vaccines should consider the needs of developing countries. Members also reviewed vulnerabilities related to foreign currency funding, as illustrated by the external funding pressures experienced by emerging market economies during the March 2020 market stress.

Members discussed potential longer-term effects of the COVID-19 pandemic, including debt overhang and corporate viability issues, and their possible impact on the financial system’s resilience and ability to support economic growth.

The Group received an update on the FSB’s work programme for 2022, and discussed areas of the workplan of importance for Sub-Saharan Africa, such as the work on climate risks and on cross-border payments.

Notes to editors

The FSB RCG for Sub-Saharan Africa is co-chaired by Lesetja Kganyago, Governor, South African Reserve Bank and Ernest Addison, Governor, Bank of Ghana. Membership includes financial authorities from Angola, Botswana, Ghana, Kenya, Mauritius, Namibia, Nigeria, South Africa, Tanzania, Uganda and Zambia as well as the Central Bank of West African States (BCEAO) and the Bank of Central African States (BEAC). Permanent observers include the Committee of Central Bank Governors of the Southern African Development Community, and the East African Community.

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 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, Governor, 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.

  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. [←]

Good Practices for Crisis Management Groups (CMGs)

30 November 2021 | PDF full text (420 KB)

Crisis Management Groups (CMGs) of Global Systemically Important Banks (G-SIBs) have been in place for over 10 years as a core part of the post global financial crisis coordination infrastructure.

This report sets out good practices that have helped CMGs to enhance their preparedness for the management and resolution of a cross-border financial crisis affecting a Global Systemically Important Bank (G-SIB) as per the FSB Key Attributes. It draws on a stocktake carried out by the FSB in 2020 and CMG members’ experience during the COVID-19 pandemic.

The focus is on CMG activities that seek to enhance crisis preparedness rather than on cooperation during a actual itself. The good practices identified in this report are organised along 16  desired outcomes that CMGs seek to achieve and relate to:

  1. the structure and operation of CMGs;

  2. resolution policy, strategy and resolvability assessments;

  3. coordination on enhancing firm’s resolvability; and

  4. enhancing home-host coordination arrangements for crisis preparedness.

FSB report on Good Practices for Crisis Management Groups (CMGs)

A shared understanding of these practices can help lean against fragmented approaches and help to enhance the effectiveness of CMGs.. While many of these practices have been well established, others are emerging or developing.

As CMGs continue to evolve, the FSB will continue to monitor the development of their practices and consider any future work to promote consistency and effective operation of CMGs.

FSB publishes report on good practices for Crisis Management Groups

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Ref: 36/2021

The FSB today published a report on good practices for Crisis Management Groups (CMGs). CMGs bring together the home and key host authorities that have a role in the resolution of a systemically important financial institution. The report sets out good practices that have helped CMGs to enhance preparedness for the management and resolution of a cross-border financial crisis affecting a Global Systemically Important Bank (G-SIB) consistent with the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions.

The report provides a reference for home and host authorities in CMGs to help them enhance their crisis management preparedness. It draws on a stocktake, undertaken in 2020, of how G-SIB home and host authorities use and operate CMGs; and on CMG members’ experience during the COVID-19 pandemic.  

The focus is on CMG activities that seek to enhance crisis preparedness rather than on cooperation during a crisis itself. The good practices identified in the report relate to:

  • The structure and operation of CMGs

  • Resolution policy, strategy and resolvability assessments

  • Coordination on enhancing a firm’s resolvability

  • Enhancing home-host coordination arrangements for crisis preparedness

A shared understanding of these practices can help lean against fragmented approaches and support the effectiveness of CMGs. While many of these practices have been well established, others are emerging or developing. As CMGs continue to evolve in performing their activities, the FSB will continue to monitor the development of their practices and consider any future work to promote consistency and effective operation of CMGs.

Notes to editors

Crisis Management Groups (CMGs) of Global Systemically Important Banks (G-SIBs) have been in place for over 10 years as a core part of the post global financial crisis coordination infrastructure. The FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions, Key Attribute 8, sets out that home and key host authorities of all G-SIBs should maintain CMGs with the objective of enhancing preparedness for, and facilitating the management and resolution of, a cross-border financial crisis affecting the G-SIBs. Pursuant to the Key Attributes, CMGs focus on a broad range of crisis management issues, including but not limited to crisis management related information sharing, recovery and resolution planning, and the assessment of resolvability of a particular G-SIB.

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, Governor and Vice Chair for Supervision, 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.

Good Practices for Crisis Management Groups

View the Standard

This report sets out good practices that have helped Crisis Management Groups (CMGs) to enhance their preparedness for the management and resolution of a cross-border financial crisis affecting a Global Systemically Important Bank (G-SIB) consistent with the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions.

The focus is on CMG activities that seek to enhance crisis preparedness rather than on cooperation during a crisis itself. The good practices identified in this report are organised along 16 desired outcomes that CMGs seek to achieve and relate to: (1) the structure and operation of CMGs; (2) resolution policy, strategy and resolvability assessments; (3) coordination on enhancing firms’ resolvability; and (4) enhancing home-host coordination arrangements for crisis preparedness.

FSB Asia group discusses financial stability outlook and risks from outsourcing and third-party relationships

29 November 2021

Press enquiries:
+41 61 280 8477
[email protected]
Ref: 35/2021

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

Members discussed global and regional macroeconomic and financial market developments and their potential impact on the region, including risks to financial stability arising from the COVID-19 pandemic and potential policy adjustments to aid the recovery. Members further reflected on the challenges arising from debt overhang and possible policy measures to address them.

Members also considered financial stability implications arising from rapid financial and technological innovation, and how the benefits of financial innovation could be harnessed while containing risks.

Members discussed financial stability, regulatory and supervisory issues related to outsourcing and third-party relationships. Points covered included any adjustments that authorities might be considering to address the concentration risk arising from the dependence on one or a small number of outsourced or third-party service providers of critical services.

The group received an update on the FSB’s work programme and the planned deliverables to the G20 in during the Indonesian Presidency in 2022. Members discussed areas of importance for RCG Asia member jurisdictions and how members could contribute to the FSB’s work programme.

Notes to editors

The FSB RCG for Asia is 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.

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 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, Governor, 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.

  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. [←]