The FSB says it will produce an assessment of initial lessons learned from the pandemic and a report on the factors needed for an orderly unwinding of support measures.
The FSB (Financial Stability Board) has published a letter from Chairman Randal Quarles to G20 Finance Ministers and Central Bank Governors ahead of their virtual meeting on Friday (26 February).
The letter says the FSB work programme for 2021 seeks to address vulnerabilities directly related to Covid-19, increase the resilience of NBFI (non-bank financial intermediation), and support strong, sustainable, and balanced growth in a post-Covid world.
To address Covid-19 related vulnerabilities, the FSB will produce an assessment of initial lessons learned from the Covid Event for financial stability, and report in April on the factors needed for an orderly unwinding of support measures. The FSB will also publish in April the final version of its evaluation of TBTF (too-big-to-fail) reforms for banks.
The FSB has been working to examine and address specific risk factors that contributed to amplification of the March 2020 market turmoil, which has served to enhance its understanding of systemic risks in NBFI and explore policies to address these risks. The FSB plans to deliver policy proposals to enhance the resilience of money market funds in July for public consultation.
In October, the FSB also plans to deliver a final set of quantitative targets for making cross-border payments cheaper, faster, more transparent, and more inclusive, along with a progress report on the implementation of its roadmap to enhance cross-border payments. The FSB will also provide an update on regulatory and supervisory approaches to global ‘stablecoins’.
Also in its work plan are efforts to assess the availability of data through which climate-related risks to financial stability could be monitored, as well as any data gaps. The FSB will also coordinate with other standard-setting bodies to promote globally comparable, high-quality, and auditable standards of disclosure, and review regulatory and supervisory approaches to addressing climate-related risks at financial institutions.
The FSB will also continue in its efforts to address challenges to enhancing financial stability that existed before Covid-19, including work to enhance CCP resilience, recovery, and resolvability; explore areas to harmonise cyber incident reporting; and ensure a smooth transition away from LIBOR by end-2021.
The FSB’s letter is available here.