FSB Report on International Cooperation to Address Impact of COVID-19
FSB published a report that sets out the financial stability implications of COVID-19 pandemic and the policy measures taken to address the related challenges. The report sets out five principles that underpin the official community’s rapid and coordinated response to support the real economy, maintain financial stability, and minimize the risk of market fragmentation. Based on the principles, the report sets out the ways in which FSB supports international cooperation and coordination on the COVID-19 responses. The report was delivered to G20 Finance Ministers and Central Bank Governors ahead of their virtual meeting on April 15, 2020. Annex 1 of the report contains a table that provides a high-level overview of policy measures taken by the authorities in FSB jurisdictions in response to the COVID-19 outbreak.
The response of official sector community is underpinned by the following principles:
- Authorities will monitor and share information on a timely basis to assess and address financial stability risks from COVID-19, to maximize the benefit of a global policy response.
- Authorities recognize, and will make use of, the flexibility built into existing financial standards—including through the use of firm-specific and macro-prudential buffers—to sustain the supply of financing to the real economy, to support market functioning, and to accommodate robust business continuity planning.
- Authorities will continue to seek opportunities to temporarily reduce operational burdens on firms and authorities, to assist them in focusing on COVID-19 response. This includes, for instance, delaying implementation deadlines, re-prioritizing timetables for initiatives in other policy areas, or providing flexibility in technical compliance rules.
- Authorities’ actions will be consistent with maintaining common international standards and preserving an international level playing field. Such actions will not roll back regulatory reforms or compromise the underlying objectives of existing international standards.
- Authorities will coordinate, through the FSB and other standard-setting bodies, the future timely unwinding of the temporary measures taken, to assist in returning financial conditions and firms’ operations to normal in a smooth and consistent manner and to maintain financial stability in the longer term.
On the basis of these principles, FSB is supporting international cooperation and coordination on the COVID-19 response in three ways. First, FSB is regularly sharing information among financial authorities on evolving financial stability threats on the policy measures that financial authorities are taking, or are considering, and on the effects of those policies. Second, FSB is assessing potential vulnerabilities, in an effort to better understand the impact of COVID-19 on financial markets in individual jurisdictions and across the globe and to inform discussions of policy issues. Third, FSB members are coordinating on their responses to policy issues and this includes the measures that standard-setting bodies and national authorities take to provide flexibility within international standards or reduce operational burdens.
Related Links
Keywords: International, Banking, Insurance, Securities, COVID-19, Financial Stability, Cross-Border Cooperation, Policy Response, G20, FSB
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs Publish Reporting Templates for Financial Conglomerates
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA Publishes Report on Asset Encumbrance of Banks in EU
EBA published the annual report on asset encumbrance of banks in EU.
MAS Revises Guidelines on Technology Risk Management
MAS revised the guidelines that address technology and cyber risks of financial institutions, in an environment of growing use of cloud technologies, application programming interfaces, and rapid software development.
US Agencies Publish Updates for Call Reports, FFIEC 101, and FR Y-9C
FED updated the reporting form and instructions for the FR Y-9C report on consolidated financial statements for holding companies.
EBA Proposes Guidelines for Establishing Intermediate Parent Entities
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
