Lael Brainard appointed as Chair of the FSB’s Standing Committee on Assessment of Vulnerabilities (SCAV)

10 December 2021

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Ref: 42/2021

The Financial Stability Board (FSB) has appointed Lael Brainard, currently a Governor of the US Federal Reserve Board, as Chair of the FSB’s Standing Committee on Assessment of Vulnerabilities (SCAV), effective today.

The SCAV is the FSB’s committee that monitors and assesses vulnerabilities in the global financial system and proposes to the FSB Plenary actions needed to address them.

Lael Brainard succeeds Klaas Knot, President of De Nederlandsche Bank, who served as Chair of the Committee since September 2016 and who became FSB Chair on 2 December. Ms Brainard’s appointment is for a two-year term, renewable once.

On Ms Brainard’s appointment, Mr Knot said “The assessment of vulnerabilities in the global financial system is a core mandate of the FSB and Lael’s deep understanding of financial stability issues makes her the ideal candidate to lead the SCAV. I look forward to working with Lael as SCAV Chair.”

Notes to editors

Lael Brainard has been a member of the Board of Governors of the Federal Reserve System since June 2014. In November 2021, President Biden announced his intent to nominate her as Vice Chair of the Federal Reserve Board.

The FSB Standing Committees have been established by the FSB Plenary to each take forward part of the FSB’s mandate. Their mandates are set out in the FSB Charter, and their current memberships are available here.

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.

FSB seeks feedback on how existing national and regional data frameworks affect cross-border data flows

The FSB is conducting a survey as part of its work under Building Block 6 of the Roadmap for enhancing Cross-border Payments, where the FSB agreed to conduct a stocktake of existing national and regional data frameworks relevant to the functioning, regulation and supervision of cross-border payment arrangements, and to identify issues relating to cross-border use of those data by national authorities and by the private sector.

The FSB wishes to gather stakeholders’ feedback in order to better understand how requirements applicable to data – e.g., where and what data must be stored/retained, where it may be transferred, the rules governing the security or access to data, could affect (either enabling or impeding) cross-border payments, by potentially affecting cost, speed, access, security of cross-border payments, or interoperability of cross-border payment networks. Stakeholder views are also requested on what any potential frictions are, as well as which policies are most effective.

Many of the frictions contributing to these challenges arise from their cross-jurisdictional nature. One of the key topics to consider is how existing national and regional data frameworks interact with and affect the functioning, regulation and supervision of cross-border payment arrangements.

Data Frameworks within scope include:

  • Domestic data frameworks, including rules, regulations, guidelines and supervisory guidance, that affect the provision of – or access to – cross-border payment services in one or more jurisdictions, or the manner in which those services utilize cross-border payments data in one or more jurisdictions, such as:
    • Frameworks regulating access to data, such as open banking frameworks
    • Frameworks regulating data privacy, security or storage, such as data location requirements, electronic communications, data sharing with use of third-party providers
    • Requirements for data retention, e.g., required data items for regulatory compliance
    • Multilateral, bilateral trade agreements covering use and sharing of data across borders
  • Implementation of international standards from the FSB and other standard-setting bodies, including BCBS, CPMI, FATF, IAIS, IOSCO, if not included as part of formal domestic data frameworks.
  • Other international efforts, arrangements, or agreements that jurisdictions may implement in their domestic data frameworks or that may affect cross-border data flows.

In particular, the FSB invites feedback from banks, non-banks, financial market infrastructures, academics and industry associations on the following issues:

  1. How, in your view, do data-specific requirements or objectives of existing national and regional data frameworks, such as those listed above, currently affect (either positively or negatively):
    1. the cost and speed of delivering payments,
    2. access and transparency (e.g., through compliance costs or through measures enabling or reducing competition) and
    3. other aspects that affect the delivery of, or regulatory compliance with respect to, cross-border payments?
  2. More specifically, what barriers to cross-border use of data do you see in existing data frameworks that will impede our ability to address the four challenges faced by cross-border payments?
  3. What areas of improvement could you suggest in data frameworks in order to overcome these barriers? Are there effective practices you would highlight to the FSB membership?
  4. Can approaches to data frameworks in one jurisdiction impact the provision or supervision of cross-border payments services in other jurisdictions? Are there particular issues that you would like to highlight?
  5. Are there particular payment corridors (especially related to emerging markets) that you wish to highlight to the FSB as facing specific challenges relating to data frameworks?

Responses to the survey will support FSB member authorities in the analysis of the constraints on cross-border data flows imposed by existing national and regional data frameworks.

Please submit your feedback via the online survey. The survey closes on Friday 14 January 2022 at 08:59 AM CET.

For questions please contact the FSB.

2021 Resolution Report: “Glass half-full or still half-empty?”

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Ten years since the adoption of the “Key Attributes of Effective Resolution Regimes”, how far have we come and where do we go from here?

This year’s Resolution Report commemorates the tenth anniversary of the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (“Key Attributes”) which were adopted by the FSB Plenary in October 2011 and endorsed by the G20 at the Cannes Summit in November 2011.

Since their adoption ten years ago, the FSB Key Attributes of Effective Resolution Regimes have set the standard for the reform of resolution regimes and resolution planning across all sectors. While progress towards resolvability has been significant, the FSB´s recent evaluation of the “too big to fail” reforms found that a number of gaps need to be addressed to fully realise the benefits of the resolution reforms. Looking ahead, emerging themes in resolution planning relate to digital innovation, including in relation to reliance on third-party service providers and cloud services and the need to assess resolvability of non-traditional market participants.

  • Banks – Important work remains to improve the resolvability of global systemically important banks. Work continues on allocation of Total Loss-Absorbing Capacity (TLAC) resources within groups, G-SIBs’ capabilities for access to funding in resolution, valuation and continuity of access in resolution to financial market infrastructures (FMIs). Cross-border issues remain to be addressed for instance in relation to funding in resolution and bail-in execution. The FSB will soon publish a practices paper that summarises the issues on the latter.

  • Central Counterparties (CCPs) – Uncertainty remains around the resolvability of CCPs given their systemic role in the financial system. A preliminary analytical report on CCP financial resources will be published in early 2022 and will inform options for potential new or revised international policy on the use, composition or amount of financial resources for CCP recovery or resolution.

  • Insurers – Progress on resolution reforms and resolution planning implementation in the insurance sector has been mixed. As in prior years, some jurisdictions have identified systemically important insurers and/or internationally active insurance groups. Work on resolution planning and resolvability assessments for these institutions has started or is under way. The FSB will soon publish two papers that present practices regarding financial and operational interconnectedness in resolution planning and funding in resolution.

The FSB has also published the data underpinning the Resolution Reform Index which is used in Graph 5 of the Resolution Report. The index illustrates the progress of FSB jurisdictions in adopting comprehensive bank resolution reforms since the global financial crisis. A detailed description of the RRI can be found in Annex F of the March 2021 FSB Report on the Evaluation of Too-Big-To-Fail Reforms.

Datasets from the report are publicly available for use in accordance with the FSB’s normal terms and conditions.

Resolution Report marks 10 years since the adoption of the FSB’s Key Attributes of Effective Resolution Regimes

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

The Financial Stability Board (FSB) today published its 2021 Resolution Report. This year’s report commemorates the tenth anniversary of the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (“Key Attributes”) and takes stock of progress made in implementing FSB resolution policies and enhancing resolvability across the banking, financial market infrastructure, and insurance sectors. It also sets out the FSB’s priorities in the resolution area going forward.

Since their adoption ten years ago, the Key Attributes have set the standard for the reform of resolution regimes and resolution planning across all sectors. Progress towards resolvability has been significant, but the FSB´s recent evaluation of the “too big to fail” reforms found that a number of gaps need to be addressed to fully realise the benefits of the resolution reforms. In addition, digital innovation is giving rise to new challenges for resolution planning, including in relation to the reliance on third-party service providers and cloud services, and the need to assess resolvability of non-traditional market participants.

  • Banks – Work is under way to build up external TLAC for four emerging market economy G-SIBs due to comply with the TLAC standard by January 2025. All other G-SIBs report that they already meet or exceed the final TLAC requirement. Not all G-SIBs consistently disclose information on internal TLAC. Cross-border issues remain to be addressed, for instance in relation to funding in resolution and bail-in execution. The FSB will shortly publish a practices paper that summarises the issues on the latter.

  • Central Counterparties (CCPs) – Uncertainty remains around the resolvability of CCPs given their systemic role in the financial system. A preliminary report will be published in early 2022 and will inform options for new or revised international policy on the use, composition or amount of financial resources for CCP recovery or resolution.  

  • Insurers – As in prior years, some jurisdictions have identified systemically important insurers and/or internationally active insurance groups. Work on resolution planning and resolvability assessments for these institutions has started or is under way. The FSB will soon publish two papers that present practices regarding financial and operational interconnectedness in resolution planning and funding in resolution.

Notes to editors

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.

2021 Resolution Reform Index (RRI)

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

6 December 2021

Press enquiries:
+41 61 280 8477
[email protected]
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. [←]