The Financial Stability Board (FSB) has released a letter from its Chair, Andrew Bailey, addressed to G20 Leaders ahead of the upcoming summit in Johannesburg on November 22-23. In the letter, Bailey acknowledges the difficult economic environment and urges global cooperation to modernize and strengthen financial regulation while maintaining stability.
Bailey's letter points to the increasing significance of nonbank financial intermediaries in global markets. He notes that private credit markets have expanded to an estimated $2 trillion worldwide. The FSB plans to monitor this sector closely and assess how these changes might affect the resilience of the financial system. Bailey states that it is essential for the evolution of nonbank finance not to undermine financial stability.
The letter also stresses the need for faster progress on cross-border payments. While some improvements have been made, Bailey warns that current efforts are not enough to meet targets set by the G20. He calls for increased momentum and attention to national policy barriers in order to fulfill the objectives outlined in the G20 Roadmap for Enhancing Cross-Border Payments.
Bailey highlights new developments in payment systems, particularly digital assets such as stablecoins, which are being used more frequently for payments. He emphasizes that authorities should ensure regulatory frameworks are effective, consistent, and support safe innovation. "It will be equally important to consider how stablecoins can operate effectively and safely across borders," he writes. The FSB’s work program for next year will focus on stablecoins and other emerging forms of payment.
The letter concludes with a reaffirmation of the FSB’s commitment to help G20 countries address these challenges while maintaining financial stability and supporting sustainable economic growth.
The FSB brings together national authorities responsible for financial stability from 24 countries and jurisdictions along with international institutions and sector-specific groups. Its Secretariat is based in Basel, Switzerland, hosted by the Bank for International Settlements.