In a letter to G20 leaders, Financial Stability Board ("FSB") Chair Mark Carney reported the steps that the FSB has taken to meet its 2018 priorities. The four priorities include (i) dealing with emerging vulnerabilities while capitalizing on innovation, (ii) the completion and implementation of post-crisis G20 reforms, (iii) ensuring that such reforms are operating efficiently and (iv) optimizing how the FSB works in order to maximize effectiveness and transparency.
Mr. Carney highlighted:
- the importance of continued vigilance to contain the risks of "non-bank finance";
- that the FSB will seek to develop effective responses to major cyber incidents;
- the necessity of "harnessing" the advantages of new financial technologies while also controlling the risks;
- that the FSB is working with standard-setters to finish work on policy areas and focus on the implementation of financial reforms such as (i) implementing Basel III and (ii) finalizing a policy to deliver "resilient, recoverable and resolvable central counterparties";
- that the International Association of Insurance Supervisors is developing a framework to address systemic risks in the insurance sector;
- deliverables, such as completing a toolkit of measures to deal with the causes of misconduct;
- maintaining an open financial system through the Correspondent Banking Action Plan;
- alleviating the financial stability risks from climate change;
- supporting infrastructure finance; and
- making derivative markets safer through incentives to centrally clear.
Mr. Carney also commended his successor Randal K. Quarles (Governor and Vice Chair for Supervision of the Board of Governors of the Federal Reserve System). He said that Mr. Quarles and new Vice Chair Klaas Knot (President of De Nederlandsche Bank) "will provide strong leadership as the FSB moves forward with implementing the post-crisis reforms and addressing any emerging vulnerabilities in the global financial system."
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