The FSB Plenary met in Basel to discuss risks and vulnerabilities from market developments in the global financial system and progress against its 2018 workplan for delivery to the Argentine G20 Summit in November. Plenary members noted the considerable progress made over the last decade in strengthening the resilience of the financial system, but stressed the importance of monitoring financial markets during the transition away from a very low interest rate environment.
The key highlights of the meeting are as follows:
- The Plenary discussed progress on crypto-assets deliverables and agreed on a framework to monitor potential emerging financial stability risks of crypto-assets. Members also received an update on the ongoing work by BCBS, CPMI, and IOSCO on their work on crypto-assets, including monitoring bank exposures, work on applications of the underlying technologies and use in payments, and considering issues stemming from initial coin offerings and crypto-asset exchanges that could impact investor or consumer protection. FSB will publish a summary of its work and that of the standard-setting bodies on crypto-assets, ahead of the July meeting of G20 Finance Ministers and Central Bank Governors.
- The Plenary approved for publication, in July, a consultation paper on the common cyber lexicon that FSB has developed. The cyber lexicon is intended to support FSB, standard-setting bodies, authorities, and private-sector participants in addressing cyber security issues and enhancing cyber resilience in the financial sector.
- FSB discussed preliminary results from two ongoing evaluations of the effects of reforms: on the financing of infrastructure investment and on the incentives to centrally clear over-the-counter derivatives. Public consultations on both evaluations will be issued in the next two months. The final reports will be delivered to the G20 Leaders’ Summit and published in November. Two other evaluations agreed on by FSB will be launched in the coming months. These are an evaluation of the effects of reforms on the financing of small and medium-size enterprises, which will be delivered under the Japanese G20 Presidency, along with an evaluation of the effects of policies to address too-big-to-fail, which will be completed in 2020.
- IOSCO updated the Plenary on its work to develop consistent leverage measures for investment funds, as part of its work to implement the FSB policy recommendations on structural vulnerabilities from asset management activities. IOSCO plans to publish the consultative document on funds’ leverage measures in the autumn.
- To ensure effective engagement with non-FSB jurisdictions, the Plenary, at its October 2017 meeting, had asked each of the six FSB Regional Consultative Groups (RCGs) to consider whether to recommend any changes to the jurisdictions in their membership. Based on recommendations from RCGs, the Plenary has agreed to invite several new jurisdictions to join the RCGs.
- The Plenary received an update on the ongoing work of the Task Force on Climate-Related Financial Disclosures (TCFD) to promote and monitor adoption of its voluntary recommendations to companies for effective disclosure of climate-related financial risks. The TCFD will publish its monitoring report in September.
Related Link: Summary of Plenary Meeting
Keywords: International, Banking, Securities, TCFD, FinTech, Implementation Monitoring, Shadow Banking, FSB
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