On 13 July 2023, the Financial Stability Board (FSB) published a letter from its Chair, Klaas Knot, to G20 Ministers and Central Bank Governors, ahead of their meeting on 17-18 July 2023.
The letter sets forth the following:
- The global financial system continues to face a challenging outlook. With most major economies having transitioned out of a low interest rate environments, amid ongoing inflation concerns, the prospect of more muted economic growth and further bouts of financial market volatility looks large.
- The FSB and other standard setting bodies are working closely together to draw out lessons from the recent banking-sector turmoil.
- Developing a global regulatory framework to address the vulnerabilities in crypto-asset markets and activities has been a key priority of the FSB. The FSB and the International Monetary Fund (IMF) will deliver a joint paper to the G20 in September, synthesising the policy findings from IMF work on macroeconomic and monetary issues and FSB work on supervisory and regulatory issues.
- The FSB’s work to enhance the resilience of the non-bank financial intermediation (NBFI) sector remains as important as before. A progress report on the FSB’s work programme to enhance the resilience of the NBFI sector, which will include an updated programme for future work, will be sent to G20 leaders in September.
- The FSB’s policy toolkit for enhancing third-party risk management and oversight, published for consultation last month, aims to reduce fragmentation in regulatory and supervisory approached across jurisdictions and sectors, and strengthen financial institutions’ ability to manage third-party risks.
- Progress has been steady across all four block of the FSB’s Roadmap to address climate-related financial risks. The FSB is delivering to the G20 an updated Roadmap, which will be published on 13 July.