In a letter to the G20 Finance Ministers and Central Bank Governors, the FSB Chair Randal K. Quarles presents the ongoing policy work of FSB. The letter, which was published ahead of the G20 meeting in October 2020, discusses FSB work in the areas of supervising developments in financial technology and innovation, enhancing cross-border payments, and promoting a resilient and integrated global financial system. The letter highlights that FSB will provide a comprehensive report on the financial stability implications of, and policy responses to, the shocks related to COVID-19 crisis, during the November G20 Summit. This holistic review of the market shock will inform the future actions of FSB in 2021 under the Italian G20 Presidency to improve the resiliency of the nonbank financial intermediation sector.
The letter notes that FSB has not lost sight of the important ongoing work in financial innovation, payments systems, cyber resilience, and market fragmentation. FSB is submitting, to the G20, work addressing issues at the frontier of financial innovation and technology, including:
- A toolkit of effective practices that FSB encourages regulators and financial institutions to use to respond to, and recover, from the negative impacts of a cyber incident
- An examination of the impact that bigtech firms have on emerging market and developing economies
- An assessment of how suptech and regtech technologies may improve authorities’ supervisory capabilities and institutions’ regulatory compliance
- High-level recommendations for regulatory, supervisory, and oversight responses to “stablecoin” instruments
- Roadmap of FSB for developing cross-border payment systems and processes that are faster, more inclusive, less expensive, and more transparent
During 2021, the standard-setting bodies will consider whether and how to update international standards in light of the FSB recommendations to ensure that risks are adequately mitigated. The letter also highlights that FSB will provide final report concerning the effects of too-big-to-fail reforms in early 2021. FSB continues to coordinate work to support LIBOR transition, which remains an essential task that will strengthen the global financial system. FSB is developing a global transition roadmap that is intended to raise awareness about the steps financial and non-financial firms should be taking now and over the remaining period to the end of 2021, to successfully achieve this transition.
Keywords: International, Banking, Securities, COVID-19, Fintech, Bigtech, Regtech, Suptech, G20, Too Big to Fail, Stablecoins, Cross-Border Payments, Benchmark Reforms, FSB
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