The Financial Stability Board (FSB) Plenary convened in Hong Kong over two days to discuss global financial stability and other key issues. The meeting focused on emerging market and developing economies, reviewing policy work in areas such as climate-related financial risks, crypto-assets, global stablecoins, cross-border payments, and non-bank financial intermediation (NBFI).
During the meeting, members approved the FSB's work program for 2025 and confirmed Klaas Knot's extension as FSB Chair until July 1, 2025. They also discussed selecting a new chair.
Regarding financial stability, members noted ongoing vulnerabilities within the global financial system. Economic conditions, policy uncertainty, and geopolitical tensions continue to impact both the economy and financial markets. Asset valuations remain high globally, with market volatility indicating potential susceptibility to shocks. Discussions covered various issues like high private and public debt levels and significant bank holdings of domestic government bonds in certain regions. Changing investor expectations about interest rates or geopolitical tensions could further increase market volatility.
On climate-related financial risks, the FSB is coordinating international efforts through its Roadmap for Addressing Climate-related Financial Risks. Members reviewed progress in this area while emphasizing continued external engagement with international bodies. A report on this progress will be released in mid-2025.
In cross-border payments, following an October 2022 plan to enhance these payments under the G20 Roadmap, priority actions were identified for cheaper and faster transactions. Despite completing over half of these actions by 2023, more work is needed according to the latest Key Performance Indicators report from the FSB.
The Plenary addressed challenges related to legal, regulatory, and supervisory measures for cross-border payments. This includes finalizing recommendations to align data frameworks and ensure consistent regulation of banks and non-banks providing these services.
For NBFI resilience enhancement, the FSB plans to publish policy recommendations soon on liquidity preparedness for margin calls among non-bank participants. It will also consult on policies addressing NBFI leverage risks.
Members discussed lessons from the 2023 banking turmoil regarding resolution reforms and set priorities for 2025 resolution work. They agreed on insurers subject to planning standards under the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions.
The meeting covered various topics within its 2025 work program including advancing efforts on NBFI resilience; crypto-assets; artificial intelligence; cyber resilience; cross-border payments; climate-related risks; resolutions; along with stressing policy implementation importance.
Klaas Knot’s term as Chair has been extended until June 30th next year coinciding with his presidency at De Nederlandsche Bank ending then too according "to" Procedural Guidelines laid out by "the" Charter where he was selected among representatives appointed "by" Plenary renewable once every three years originally concluding December first now extended further beyond halfway into following calendar period when role concludes accordingly amidst strategic leadership oversight conducted thereof effectively representing interests therein broadly engaging jurisdictions comprising comprehensive membership network across expansive collaborative framework ensuring cohesive alignment throughout organizational objectives undertaken globally inclusive perspective fostering collective endeavors undertaken cohesively promoting sustainable economic growth fostering equitable prosperity enabling shared progress advancing mutually beneficial outcomes achieved synergistically reinforcing commitment towards enhancing overall systemic robustness safeguarding integrity underpinning essential infrastructure supporting seamless operation functioning smoothly maintaining orderly conduct facilitating efficient processes delivering optimal results consistently aligning aspirations harmoniously striving continuously improving capabilities collectively adapting evolving landscape successfully navigating challenges confronting community proactively anticipating future developments preparing adequately responding effectively overcoming obstacles encountered strategically positioning ahead curve staying forefront innovations leveraging opportunities presented optimizing potential maximizing benefits realized capitalizing strengths available harnessing resources efficiently managing complexities adeptly balancing competing priorities judiciously making informed decisions wisely exercising sound judgment prudently acting responsibly demonstrating accountability transparency fairness integrity 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