The Financial Stability Board (FSB) has published a press release following its recent meeting in London in which it discussed vulnerabilities affecting the global financial system and reviewed work plans for completing core financial reforms.

The FSB states that the global economy has been improving, and monetary policy in the US is in the early stages of a normalisation process, after an extended period of exceptional accommodation. However, the improved global outlook does not diminish the need to continue to strengthen financial resilience.

The press release also discusses the FSB’s review of work plans in a number of key areas including ending too-big-to-fail, shadow banking, making derivatives markets safer and benchmark reforms.

In relation to ending too-big-to-fail, the FSB reviewed work underway in the following areas:

  • to develop proposals by the Brisbane summit on the adequacy, composition and location of gone-concern loss-absorbing capacity for global systemically important banks;
  • to assess the cross-border impacts and global financial stability implications of structural banking reforms being implemented or proposed in jurisdictions;
  • to assist supervisors in their assessment of financial institutions’ risk culture, as deficiencies in risk culture were one of the root causes of the global financial crisis; and
  • to develop, by the Brisbane summit, a framework for the cross-border recognition of resolution actions involving both contractual and statutory elements.

View FSB plenary meets in London, 31 March 2014