The Financial Stability Board (FSB) has issued a press release following its plenary meeting in Ottawa on 22 October 2018. At the plenary meeting FSB members discussed a number of key topics:

  • market developments and vulnerabilities: normalisation of monetary policy in some advanced economies has contributed to a marked tightening of financial conditions in some emerging market economies; and some asset classes – including real estate in a number of economies – are showing signs of overvaluation. FSB members highlighted that authorities should begin developing macroprudential buffers against the associated risks of these developments where appropriate;
  • deliverables to the G20 leaders’ summit: the plenary endorsed the following six reports to be published next month and delivered to the G20 leaders’ summit:
    • the fourth annual report on implementation and effects of G20 financial regulatory reforms;
    • an evaluation of incentives to centrally clear over-the-counter derivatives;
    • an evaluation on infrastructure finance;
    • a progress report on its action plan to assess / address the risks from the decline in correspondent banking relationships;
    • the cyber lexicon; and
    • a discussion paper on the adequacy of financial resources for central counterparty (CCP) resolution and the treatment of CCP equity in resolution.
  • non-bank financial intermediation: the FSB has chosen to replace the term “shadow banking” with the term “non-bank financial intermediation” in future communications;
  • process and transparency review: a set of measures was agreed to ensure its own continued effective operation and further enhance its focus and ability to promote financial stability; and
  • FSB work programme for 2019 and beyond: new initiatives will include a project on financial stability implications of decentralised financial technologies; and an initiative to explore ways to address the risk of market fragmentation.

FSB members also received updates on specific work by the International Organization of Securities Commission, Official Sector Steering Group, International Accounting Standards Board, and the FSB’s Task Force on Climate-related Financial Disclosures.