In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021. In accordance with the FSB work program for 2021, the key priorities for the year involve addressing COVID-19 related vulnerabilities, enhancing resilience of non-bank financial intermediation, improving understanding of climate risks, enhancing cross-border payments (includes approach to regulation of stablecoins), and addressing other financial stability topics of ongoing importance. Other important financial stability topics include transition away from LIBOR, policy framework for central counterparties, and addressing cyber-security issues.
The key expected outcomes in terms of the prioritized work in 2021 are as follows:
- FSB plans to explore initial lessons learned from the COVID-19 event and report, in April 2021, on factors needed for an orderly unwinding of support measures, as part of its work to support international coordination on COVID-19 policy responses. In April 2021, FSB also plans to publish the final version of its evaluation of the too-big-to-fail reforms for banks.
- As part of its work in the area of nonbank financial intermediation, in July 2021, FSB plans to deliver policy proposals to enhance the resilience of money market funds, with a final report expected in October 2021. Other work will entail examining the frameworks and dynamics of margin calls in centrally cleared and uncleared markets and the liquidity management preparedness of market participants to meet margin calls.
- FSB plans to assess the availability of data through which climate-related risks to financial stability could be monitored, with aim of identifying existing data gaps. FSB also intends to coordinate with other standard-setting bodies to promote globally comparable, high-quality, and auditable standards of disclosure and to review the regulatory and supervisory approaches to addressing climate-related risks at financial institutions.
- FSB plans to issue an update on the regulatory and supervisory approaches to global stablecoins and to deliver a final set of quantitative targets for making cross-border payments cheaper, faster, more transparent, and more inclusive.
Keywords: Keywords: International, Banking, COVID-19, G20, Stablecoins, Cyber Risk, Climate Change Risk, Non-Bank Financial Intermediation, Work Priorities, Resolution Framework, Benchmark Reforms, FSB
Previous ArticleEU Publishes Corrigendum to Revised Capital Requirements Regulation
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.