On 26 February 2024, the Chair of the Financial Stability Board (FSB), Klaas Knot, wrote a letter to the G20 Finance Ministers and Central Bank Governors. The letter was submitted ahead of the G20’s meeting on 28-29 February and highlights key issues and the current challenges to financial stability. The letter outlines a workplan for 2024 that incorporates the priorities of the Brazilian G20 Presidency. The core elements of this plan are to identify and address financial system vulnerabilities in key areas including lessons from the March 2023 banking turmoil, non-bank financial intermediation (NBFI), digitalisation and climate change; and to enhance the efficiency of cross-border payments.

Lessons from the March 2023 banking turmoil

Knot writes that the FSB’s review of lessons learnt from the March 2023 banking turmoil confirmed the soundness of the international framework provided by the FSB’s Key Attributes of Effective Resolution Regimes. It also highlighted areas that deserve further attention to ensure effective implementation of the framework. These include work on public-sector backstop funding mechanisms, on better operationalising a range of resolution options such as transfer and sale of business alone or in combination with bail-in, and the impact of social media and digital innovation on resolution. Also related to the March turmoil, the FSB is undertaking analytical work to examine interest rate and liquidity risk in the financial system and to explore vulnerabilities associated with depositor runs in light of new technologies and social media. A summary of both analyses will be reported in October 2024.


The FSB is undertaking work aimed at enhancing the resilience of this critical sector, in coordination with the standard-setting bodies (SSBs) and other international organisations. Considering the vulnerabilities posed by potential mismatch between the liquidity of fund investments and daily redemption of fund units in open-ended funds (OEFs), the FSB is delivering for the G20 meeting revised policy recommendations to address vulnerabilities arising from liquidity mismatch in OEFs. Combined with the new International Organization of Securities Commission’s (IOSCO) guidance on anti-dilution liquidity management tools, the revised recommendations aim to strengthen liquidity management by OEFs compared to current practices. It is important for G20 members to endorse these recommendations and implement them as quickly as feasible. As part of its NBFI work programme, the FSB is also working on policies to enhance the monitoring of, and to address financial stability risks stemming from, leverage in NBFI, and to enhance the liquidity preparedness of non-bank market participants for margin and collateral calls. The FSB will deliver a report in July on progress in these tasks and the overall NBFI work programme.

Digital innovation

Responding to the G20’s call, in 2024 the FSB will deliver reports on the financial stability implications of the tokenisation of assets and of artificial intelligence. Knot states that the work on both these areas will complement the sector-specific work of the SSBs. The letter further emphasises digitalisation as a key focus for the FSB and highlights that it will take forward, with SSBs and international organisations, the agreed G20 Roadmap that will support implementation of a coordinated and comprehensive policy and regulatory framework. This includes implementation in jurisdictions beyond the G20 and accounts for the risks specific to emerging markets and developing economies. The FSB will deliver a status report on the Roadmap to the G20 October meeting.

The 2023 G20 Cross-border Payments Roadmap’s goal is to make cross-border payments faster, cheaper, and more transparent and inclusive while maintaining the integrity and safety of the system. As part of the G20’s work to strengthen collaboration between the public and private sector, including with experts in anti-money laundering and countering the financing of terrorism and data protection. Knot states that through collaboration, the organisations can both increase the efficiency of payments systems and further enhance their integrity and safety.

Climate change

The letter states that the FSB will continue to coordinate international work through the FSB Roadmap to deepen its analysis of climate-related financial risks to financial stability and examine the relevance of transition plans for financial stability. It will also report in November on further progress on the implementation of disclosures and reporting in line with international standards, in coordination with the International Sustainability Standards Board, IOSCO and others. As a contribution to the G20’s work on climate change, the FSB will deliver to the July meeting a stocktake on current or planned regulatory and supervisory initiatives related to the identification and assessment of nature-related financial risks.

Cross border payments

Knot again highlights how the FSB has strengthened the collaboration between the public and private sector, including with experts in anti-money laundering and countering the financing of terrorism and data protection.

The letter concludes by highlighting the FSB and G20 must continue to collaborate on prioritise global efforts to promote financial stability and harness the benefits that a more sustainable and digitalised financial system can offer to societies.