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 Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.
The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.
The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.
The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.
The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.