The work programme includes initiatives to strengthen NBFI resilience, enhance cross border payments, and address climate change, among other priorities.
The FSB (Financial Stability Board) has published its work programme for 2021, which it said aims to foster global financial stability while preserving its capacity to respond to new issues that may emerge.
The work programme items include:
Promoting financial stability during Covid-19 related market stress through international cooperation and coordination. This work will continue to include assessments of financial system vulnerabilities in the global, sharing information on policy responses, assessing their effectiveness, and coordinating the future timely unwinding of temporary measures taken.
Strengthening the resilience of NBFI (non-bank financial intermediation), as laid out in the FSB’s holistic review of the March market turmoil. This work will initially focus on money market funds (MMFs), open-ended funds, margining practices, liquidity, structure and resilience of core bond markets, and cross-border USD funding.
Strengthening the resilience and resolvability of CCPs by cooperating with CPMI and IOSCO to consider the need for and develop an international policy on financial resources in recovery and resolution. This would include assessing whether any new types of prefunded resources would be necessary to enhance CCP resolvability.
Enhancing cross-border payments by developing quantitative targets for the FSB’s roadmap, conducting a stocktake of data frameworks, and exploring the scope for and obstacles to develop a global digital Unique Identifier. The FSB will also advance discussions on the regulatory and supervisory approaches to stablecoins.
Addressing climate change and promoting sustainable finance, including through globally comparable, high-quality and auditable standards of disclosure based on the TCFD recommendations. The FSB will also work on regulatory and supervisory approaches to address climate risks at financial institutions.
Continuing to support the transition away from LIBOR to more robust benchmarks by end-2021 based on the FSB’s global transition roadmap. The FSB will monitor market participants’ readiness and give guidance to ensure a smooth transition to the new financial benchmarks, and report on transition progress to the G20.
Assessing the financial stability, regulatory and supervisory implications of FinTech (including AI and machine learning), RegTech, SupTech and BigTech. The FSB will also continue work on enhancing cyber resilience and explore the scope for convergence in the regulatory reporting of cyber incidents as well as any potential revisions to the FSB Cyber Lexicon.
Developing a comprehensive and methodical surveillance framework for assessing financial system vulnerabilities, including by identifying new and emerging risks to financial stability. This work was suspended as part of the FSB’s reprioritisation of work in light of COVID-19.
Addressing market fragmentation through continued discussion on relevant issues and policy developments, including updates from IOSCO on its work following the publication of June report on good practices on processes for deference.
Completing post-crisis financial reforms, including the implementation of standards for crisis management preparedness, recovery and resolution planning, and loss-absorbing resources.
The work programme for 2021 is available here.