The Financial Stability Board (FSB), an international body coordinating financial regulation, is working in line with the G20's roadmap to address key areas of financial stability. This includes developing a global incident reporting system for cryptocurrency institutions, alongside focusing on emerging challenges like non-bank financial intermediation, climate change, cross-border payments, and digital innovation.
The FSB's Chair, in a recent address to the G20, highlighted the growing risk of cyber incidents within the financial system. To address this, the board is designing a "format for incident reporting exchange" (FIRE) which will be open for public consultation. This system aims to facilitate the exchange of information on cyber incidents among member countries, allowing for a coordinated international response to potential threats.
Furthermore, the FSB remains committed to coordinating international efforts addressing financial risks stemming from climate change. This aligns with the G20's roadmap on the issue, which seeks to establish a comprehensive framework for managing these risks. The FSB will also contribute to the G20's roadmap on enhancing cross-border payments, which aims to improve the efficiency, speed, and cost-effectiveness of international financial transactions.
Beyond these specific initiatives, the FSB continues its work on non-bank financial intermediation (NBFI). NBFIs are institutions that provide financial services outside the traditional banking system, and their rapid growth raises potential concerns for financial stability. The FSB recently released a global monitoring report on the NBFI sector, analyzing trends and vulnerabilities in 2023.
The board also remains focused on facilitating responsible digital innovation within the financial sector. This includes exploring the potential benefits and risks associated with new technologies such as artificial intelligence and big data, while ensuring financial stability and protecting consumers.
By aligning its work with the G20's priorities, the FSB plays a crucial role in promoting a stable and resilient global financial system. The board's efforts in areas like cyber security, climate change, and digital innovation are essential to navigating the evolving landscape of financial risks and opportunities.