On 17 November 2020, the Financial Stability Board (FSB) published a letter from its Chair and two reports delivered to G20 Leaders ahead of their summit this week:

• Chair’s letter. The letter sets out three responses to financial stability vulnerabilities highlighted by the COVID-19 pandemic: (i) coming to a shared diagnosis – the market turmoil in March manifested itself differently in countries around the world. Emerging market economies experienced severe strains in offshore US dollar funding markets, whereas some advanced economies experienced significant outflows from certain types of investments; (ii) the need for continued vigilance and policy support – the challenges posed by the COVID-19 pandemic have not yet dissipated. Persistent economic uncertainty and still elevated financial stability risks call for continued vigilance; and (iii) enhancing financial sector resilience going forward – the COVID-19 pandemic has provided an opportunity to further assess financial stability risks and to refine measures put in place after the 2008 global financial crisis, where appropriate. These lessons can help strengthen financial sector resilience to better prepare for future shocks.
• Report – Holistic review of the March market turmoil. The report examines the drivers, effects and implications of the financial market turmoil in March. The COVID-19 pandemic placed the global financial system under considerable strain. Some parts of the system, particularly banks and financial market infrastructure, were generally able to absorb rather than amplify the macroeconomic shock,  supported by the post-crisis reforms. However, key funding markets experienced acute stress and public authorities needed to take a wide range of measures to support the supply of credit to the real economy by underpinning market liquidity and functioning. The March turmoil has reinforced the need to better understand interconnections and amplification channels in the financial system and to consider the nature of vulnerabilities in non-bank financial intermediation (NBFI) in relation to the liquidity stress and the implications of central bank liquidity support, and draw lessons about overall resilience of the NBFI sector. The report draws on a broad range of information sources. These include analysis by the FSB and standard-setting bodies; analysis and information provided by FSB members; input from external stakeholders (industry participants, academics, think tanks and trade associations) through a virtual outreach meeting in September. These sources taken together form the basis for the analysis in the report. The report draws lessons from the March turmoil and identifies areas for further work. The decisive policy response helped to stabilise financial markets and contain the economic and financial fallout of the pandemic to date. However, there is a need to address the vulnerabilities that became apparent during the turmoil because uncertainty about the economic outlook remains high and the risk of further market dislocations cannot be ruled out. In light of this, the report identifies lessons that form the basis for further work to increase the resilience of NBFI.
• Report – COVID-19 pandemic: Financial stability impact and policy responses. The report provides an update on financial stability developments and risks relating to COVID-19 pandemic, the international policy responses, the effectiveness of policies, the challenges that lie ahead and the way forward for the FSB.