In a recent communication to G20 Finance Ministers and Central Bank Governors, Andrew Bailey, Chair of the Financial Stability Board (FSB), emphasized the necessity for international cooperation in financial regulation amid ongoing geopolitical tensions. In his first letter as FSB Chair, Mr. Bailey outlined his key priorities which include enhancing surveillance capabilities, addressing risks to financial stability, and improving the effectiveness of the FSB.
Mr. Bailey presented a report on the FSB’s climate roadmap to the G20, focusing on international coordination, information sharing, and analyzing potential climate-related financial vulnerabilities.
The letter published by the FSB ahead of the upcoming G20 meeting on July 17-18 calls for sustained global collaboration and engagement in light of increasing fragmentation risks.
Among Mr. Bailey's priorities are enhancing surveillance capabilities to detect vulnerabilities within the evolving financial system and allowing evidence-based responses to risks. The FSB aims to publish its vulnerability assessments as part of this initiative.
Addressing key risks involves supporting robust policy implementation on Nonbank Financial Intermediation (NBFI), exploring private finance vulnerabilities, and assessing stablecoins' role in payments and settlements.
To strengthen FSB effectiveness, improvements will be considered based on the G20 Implementation Monitoring Review with a focus on standard implementation and stakeholder communication outside its membership.
The letter includes three reports delivered to the G20: policy recommendations on leverage in nonbank financial intermediation, a workplan addressing nonbank data challenges, and an update on climate-related financial risk approaches aligned with the FSB Climate roadmap.
The FSB coordinates national financial authorities' work internationally and promotes effective regulatory policies for financial stability. It comprises national authorities from 24 countries along with international institutions and sector-specific regulators. The organization is chaired by Andrew Bailey, who is also Governor of the Bank of England. Its Secretariat operates from Basel, Switzerland under the Bank for International Settlements.