The Financial Stability Board (FSB), an international organization that monitors and makes recommendations regarding the world’s financial system, recently met in Paris in order to discuss key issues facing the global financial industry, including potential vulnerabilities, various Fintech developments, and the agency’s 2020 work program.
The key topics of discussion included addressing vulnerabilities in the world’s financial ecosystem. These include the potential impact that certain structural changes in the global interest rate environment might have on financial stability. The FSB also aims to address the vulnerabilities that may be associated with collateralized loan obligations and leveraged loans.
The FSB further discussed the ability of financial institutions in certain jurisdictions to raise funds at affordable costs following adverse economic conditions.
The agency went over the FSB surveillance framework, which aims to support a review of vulnerabilities. The organization says it is planning to finalize the key parameters of the framework by next year.
The FSB also went over Fintech developments, including those in the crypto-asset industry, which were discussed by the Plenary. The agency recommended an augmented framework for monitoring financial stability risks, including those found in stablecoin platforms. The FSB also looked at the wider regulatory and supervisory issues associated with stablecoins.
The FSB says it is planning to release a consultative report next year on regulatory issues involving stablecoins.
The agency also discussed potential effects on financial reforms, and said it will release a consultation report on “too-big-to-fail” reforms for systemically vital financial institutions in June of next year, and also plans to introduce an evaluation and review of the effects of financial market fund reforms by next year.
Additionally, the FSB talked about its work program. The agency said that its main focus for next year will be to identify and address new vulnerabilities in the global financial ecosystem. The organization is planning to finalize and operationalize post-crisis reforms, while also reviewing the effects of implementing the reforms.