FSB chair updates G20 leaders on regulatory reforms, trends

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The Financial Stability Board (FSB) Chair Randal Quarles updated G20 Leaders on the implementation of financial regulatory reforms and other vital issues.

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Quarles highlighted several major themes for the G20 leaders ahead of their summit this week in Osaka, Japan. The FSB is closely monitoring new and emerging risks and vulnerabilities. For example, corporate and public debt levels have continued to rise, so the FSB is examining leveraged loan and collateralized loan obligation markets to obtain a fuller picture of the pattern of exposures. They are also working to harness the benefits of financial innovation while containing risks. Technological innovation may transform financial institutions and markets, but the risks must be contained. One example is crypto-assets, which warrant scrutiny by authorities to ensure that that they are subject to high standards of regulation.

Quarles also pointed out that the new financial regulatory framework called for by the G20 is now largely in place. However, implementation is not complete and remains uneven across reform areas, so the continued support by G20 leaders in implementing them is needed. Quarles adds that an open and resilient financial system, grounded in agreed international standards, is crucial for sustainable growth. It is critical for FSB to be able to reach out beyond its membership to promote global financial stability.

The FSB, based in Basel, Switzerland, is tasked with coordinating at the international level the work of national financial authorities and international standard-setting bodies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions. The FSB is chaired by Quarles, who is vice chairman for supervision at the US Federal Reserve. The vice chair is Klaas Knot, president, De Nederlandsche Bank.

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