On 6 October 2021, the Financial Stability Board (FSB) published a letter from its chair to G20 Finance Ministers and Central Bank Governors.

The letter focuses on two key areas of the FSB’s work:

Developing a more resilient NBFI sector

The letter notes that following the market turmoil in March 2020, the FSB agreed on an ambitious multi-year work plan to enhance non-bank financial intermediation (NBFI) resilience:

  • FSB members will assess the vulnerabilities in money market funds (MMFs) within their jurisdictions, address them using the framework and policy toolkit in set out in a new final report on MMF resilience  and work together with the International Organisation of Securities Commissions (IOSCO) to record the progress made and the effectiveness of the measures.
  • The letter also identifies policy considerations in other areas of NBFI, including open-ended funds, the impact of margin calls and the structure of core funding markets. The FSB will leverage insights from the analysis in these areas to develop a systematic risk perspective on NBFI and policies to address the risk.

Addressing challenges in cross-border payments

The letter also notes that the COVID-19 pandemic has intensified the need to address the limitations of current arrangements for cross-border payments. In 2020 the FSB delivered a roadmap to enhance these payments, so they are now faster, more inclusive, less expensive and more transparent.

With regard to the roadmap the FSB submits the following to the G20:

  • A progress report with steps for next year and beyond.
  • Quantifiable targets to address challenges of cost, transparency and access experienced by end-users.
  • A report on the progress made on the implementation of the FSB’s high-level recommendation for the regulation, supervision and oversight of “global stablecoin” arrangements.

The letter also notes that the FSB will be submitting its latest work on cyber incident reporting, to explore whether harmonisation in cyber reporting can be achieved and what work is required.