On 7 November 2019, the Financial Stability Board (FSB) published a press release outlining the discussions held during its plenary meeting in New York.
Key points from the meeting include:
- Current vulnerabilities in the global financial system. Members discussed a report assessing vulnerabilities associated with leveraged loans and collateralised loan obligations. The report suggests that vulnerabilities have grown since the global financial crisis and more work is needed to close data gaps. The full report will be published by the end of 2019. Acknowledging rising global vulnerabilities, the FSB recommends authorities to consider assessing whether existing buffers are adequate to support resilience, taking account of domestic condition and cyclical position;
- Surveillance framework. The plenary discussed the key parameters of the new surveillance framework, which the FSB plans to complete in mid-2020;
- FinTech Developments. Members endorsed an augmented framework for monitoring potential financial stability in cryptoassets markets to take into account ‘global stablecoin’ systems. The FSB intends to publish a consultative report on regulatory issues of stablecoins in April 2020. It will also publish in the coming weeks initial reports on market developments and potential financial stability implications from the entry of BigTech firms into finance and from third-party dependencies in cloud services; and
- Evaluating the effects of financial reforms. The FSB will publish its final report on the evaluation of the effects of financial regulatory reforms on the financing of small and medium-sized enterprises in November 2019. It will also start its evaluation of the effects of money market fund reforms in mid-2020.