The letter notes mounting evidence of global recovery, even if uneven across regions. However, some risks to financial stability remain elevated.
The Financial Stability Board (FSB) today published a letter from its Chair, Randal K. Quarles, to G20 Finance Ministers and Central Bank Governors ahead of their 9-10 July meeting.
The global financial system has weathered the COVID Event thus
far, thanks to greater resilience brought about by the G20 financial
regulatory reforms, and the swift, bold and determined international
policy response. But there are areas where there is a need to understand
better whether the reforms have functioned as intended, and others
where the COVID Event has surfaced vulnerabilities that need to be
addressed with urgency, notably in non-bank financial intermediation,
including in money market funds.
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On 30 June, the FSB published a consultation report on policy proposals to enhance money market fund resilience.
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On 13 July, the FSB will publish an interim report on the overall
lessons learnt from the COVID Event from a financial stability
perspective.
The Chair’s letter stresses the need for coordinated action to
address financial risks posed by climate change, noting the large, and
growing, number of international initiatives underway. The FSB has
submitted to the G20 for endorsement a comprehensive roadmap to address
climate-related financial risks. The roadmap outlines the work underway
and still to be done by standard-setting bodies and other international
organizations over a multi-year period in four key policy areas:
disclosures, data, vulnerabilities analysis, and regulatory and
supervisory approaches. In total, the FSB is publishing today three
climate-related reports:
The Chair’s letter also reiterates the importance of completing the
transition way from LIBOR to robust alternative rates by end-2021 and
strongly urges market participants to act now to complete the steps set
out in the FSB’s Global Transition Roadmap.
FSB
© FSB - Financial Stability Board
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