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    FSB Publishes Report on DGI-2, Hosts Workshop on Systemic Risk in NBFI

    The Financial Stability Board (FSB) and the International Monetary Fund (IMF) published a report that marks completion of the second phase of the G20 Data Gaps Initiative (DGI-2). The report outlines progress so far, along with the challenges and priorities for a new IMF-led initiative to address data gaps for emerging policy needs. FSB also hosted a virtual workshop on understanding and addressing systemic risks in non-bank financial intermediation (NBFI) and published various presentations that formed part of the discussions at the workshop.

    The G20 data gaps initiative report summarizes the main achievements in addressing data gaps identified during the 2007-2008 global financial crisis, including the development of conceptual frameworks and improvements in data coverage, timeliness, and periodicity. The objective of the second phase of the data gaps initiative was to implement the regular collection and dissemination of reliable and timely statistics for policy use. Despite the progress of the initiative, the report examines challenges in fully closing data gaps in areas related to securities financing transaction data, securities statistics, sectoral accounts, international investment position, international banking statistics, cross-border exposures of non-bank corporations, public sector debt statistics, and commercial property price indices. As a next step, the participating economies and international organizations will continue to address these aforementioned challenges and develop a high-level workplan for the new initiative on the emerging policy needs. The workplan covers 14 recommendations under four main statistical and data priorities: climate change; household distributional information; fintech and financial inclusion; and access to private sources of data and administrative data as well as data sharing. The new initiative on emerging policy needs will be submitted to the G20 Finance Ministers and Central Bank Governors later this year and its recommendations will be implemented within five years after the launch.

    The workshop was aimed at contributing to the FSB’s work to develop a systemic approach to non-bank financial intermediation. The workshop featured presentations of analytical work and research that advances the understanding of systemic risks in non-bank financial intermediation, along with specific policies and approaches that may be used to address these risks. The workshop was structured in four sessions, covering liquidity imbalances in bond markets and implications for systemic risk, interconnectedness in non-bank financial intermediation, data and tools to enhance risk assessment and monitoring of the non-bank financial intermediation sector, and policy tools and approaches to address systemic risk in non-bank financial intermediation. FSB has been working closely with the relevant standard-setting bodies and coordinating the international regulatory community’s assessment of vulnerabilities and the appropriate financial policy response. FSB’s work on non-bank financial intermediation involves:

    • assessing vulnerabilities in specific non-bank financial intermediation areas that may have contributed to the buildup of liquidity imbalances and the amplification of stress.
    • enhancing the understanding and ongoing monitoring of systemic risks in non-bank financial intermediation.
    • developing policies to address such risks where appropriate, including by assessing the adequacy of current policy tools and approaches given the desired level of resilience for the sector.

     

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    Keywords: International, Banking, Securities, Data Gaps Initiative, Cross-Border Exposures, ESG, Climate Change Risk, Non-Bank Financial Intermediaries, Systemic Risk, Liquidity Risk, Stress Testing, NBFI, FSB, IMF

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