In a letter to G20 Finance Ministers and Central Bank Governors, Financial Stability Board (FSB) Chair Klaas Knot emphasized the necessity of enhanced vigilance regarding vulnerabilities within the financial sector. The FSB made the letter public as part of preparations for the upcoming G20 meeting set for April 23-24.
Klaas Knot's correspondence, his last as FSB Chair, arrives amid increased financial market volatility and geopolitical risk. The letter stresses the significance of continuous surveillance, proactive policymaking, and international cooperation to safeguard the financial system's resilience.
The document points out the role non-bank financial entities have played during recent market turmoil, highlighting the FSB's efforts to reinforce the resilience of non-bank financial intermediation. The organization plans to deliver recommendations addressing stability risks related to leverage in this sector to the G20 by July. This marks an important milestone in enhancing the sector's strength.
Additionally, the letter acknowledges the FSB's initiatives to combat cyber risks, exemplified by the recent introduction of the Format for Incident Reporting Exchange (FIRE). Moreover, the FSB is working to improve cross-border payment systems, prioritizing engagement with the private sector and regulators to promote the G20 Roadmap's implementation.
Klaas Knot's letter underscores the FSB's unique position in facilitating international cooperation to tackle financial stability challenges, urging authorities to continue enacting international reforms to maintain stability and prevent fragmentation amidst evolving risks.
The FSB, headquartered in Basel, Switzerland, coordinates global efforts among national financial authorities and international standard-setting bodies to develop policies aimed at ensuring financial stability. The FSB brings together representatives from 24 countries and jurisdictions, international financial institutions, and regulatory bodies, while also engaging with roughly 70 additional jurisdictions via six Regional Consultative Groups. The FSB Chair is currently Klaas Knot, who is also the President of De Nederlandsche Bank.