FSB published a statement that outlines its work toward addressing the financial stability risks posed by COVID-19, along with the reprioritization of its work program for 2020. Also published was a statement and press release from G20 leaders, in response to the COVID-19 crisis, along with a summary of the meeting of the FSB Regional Consultative Group (RCG) for the Middle East and North Africa (MENA). During the meeting, members discussed recent financial market developments, including the financial stability implications from COVID-19. Among other issues, the RCG discussed the FSB work to develop effective practices for cyber incident response and recovery. A preliminary set of practices has been drawn from survey responses by authorities, including those in the region. The summary statement highlighted that, in early 2020, FSB plans to launch a consultation on a toolkit for cyber incident response and recovery.
The overall work of FSB on COVID-19 will involve regular information-sharing on evolving financial stability threats and on the policy measures that financial authorities are taking. FSB will also work toward assessing financial risks and vulnerabilities in the current environment and coordinating policy responses to maintain global financial stability. FSB members are cooperating closely to coordinate action, including financial policy responses in their jurisdictions, to maintain global financial stability, keep markets open and functioning, and preserve the capacity of the financial system to finance growth.
The COVID-19 crisis called for a reprioritization of FSB work program, which takes into account several factors. These factors include whether the work is relevant to current crisis management, whether the evolution of the crisis may substantially change the findings, whether there are other important reasons to maintain the existing timing and/or scope of the project, and whether postponing or scaling back the work could relieve COVID-related additional resource pressures on FSB members and staff and on financial institutions and other stakeholders. FSB will focus on monitoring the current risks to global financial stability, particularly the impact of COVID-19 on the resilience of the financial system. The main elements of the reprioritization are as follows:
- The prioritization will support timely discussion of policy issues arising from vulnerabilities in non-bank financial intermediation that are surfacing during the COVID-19 crisis, along with decisions on how to organize such work in FSB going forward.
- Prioritization will ensure that key deliverables to the Saudi G20 Presidency will be provided and that FSB completes initiatives on topics that are likely to remain of policy relevance in the near term.
- The three-stage work to develop a roadmap on cross-border payments, in coordination with CPMI, will continue as scheduled, given the importance of efficient cross-border payments systems.
- Technical work on central counterparty resolution and the implementation of the Total Loss-Absorbing Capacity standard remains a priority.
- With respect to the OTC derivatives reforms, finalizing the oversight arrangements for Unique Product Identifier (UPI) and Unique Transactions Identifier will continue, as the UPI service provider awaits clarity on the oversight arrangements.
- The transition from London Inter-bank Offered Rate (LIBOR) remains a priority, as firms cannot rely on LIBOR being produced after end 2021. Benchmark transition will help to strengthen the global financial system.
- Implementation monitoring will track regulatory relief measures taken by standard-setting bodies. Other work will be reduced to the completion of near-final projects and the production of a streamlined annual report to G20.
- Press Release on COVID-19 Measures
- FSB Actions and Work Program
- Press Release on RCG Meeting
- G20 Press Release (PDF)
- Statement of G20 Leaders (PDF)
Keywords: International, Middle East and Africa, MENA, Banking, COVID-19, RCG, Work Program, IBOR Reform, Resolution Framework, OTC Derivatives, NBFI, Cyber Risk, FSB
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