The Financial Stability Board (FSB) has published a letter from its Chair, Klaas Knot, addressed to G20 Finance Ministers and Central Bank Governors ahead of their upcoming meeting on February 26-27. The letter highlights the need for vigilance in light of changing financial conditions and geopolitical uncertainties. The FSB has been focusing on reforms to strengthen resilience by addressing vulnerabilities in the financial system. These reforms aim not only at ensuring safety but also at fostering innovation through clear policy approaches for emerging topics such as crypto-assets.
Knot's letter emphasizes that with many key reforms either developed or nearing completion, the FSB is now concentrating more on promoting and monitoring their implementation. This focus will be significant in 2025 as the FSB conducts a strategic review of 15 years of reform monitoring. The review aims to evaluate the effectiveness of post-global financial crisis regulatory reforms and identify areas for improvement in global implementation tools. An interim report on this work will be presented to the G20 in October.
The FSB is also actively assessing vulnerabilities within the financial system, including addressing data gaps in non-bank financial intermediation which have hindered effective vulnerability assessments and policy responses.
In his letter, Knot outlines various ongoing projects at the FSB relevant to international financial stability, such as cross-border payments, digital innovation, and climate-related financial risks.
The FSB plays a crucial role in coordinating and overseeing the implementation of agreed-upon financial reforms among its members, reporting progress to the G20, conducting peer reviews, and promoting adherence to international standards. It coordinates efforts among national authorities responsible for financial stability across 24 countries and jurisdictions, alongside international institutions and regulators.
Klaas Knot serves as both Chair of the FSB and President of De Nederlandsche Bank. The FSB Secretariat operates out of Basel, Switzerland under the hosting arrangement with the Bank for International Settlements.