This letter was submitted to G20 Leader ahead of their meeting on 15-16 November.

The letter notes that developments since the Rome Summit have been a stark reminder that global financial stability should not be taken for granted. The return of inflation to levels not seen in decades has resulted in a strong interest rate response and significantly tighter financial conditions. The tightening is occurring amidst record-high levels of debt of non-financial corporates, households and governments globally, and in a global financial system where the provision of finance through non-banks has become as important as bank credit.

The letter notes that during the Indonesian G20 Presidency, the FSB has intensified its monitoring of current vulnerabilities and taken forward work to reinforce the resilience of the financial system. At the same time, the FSB has continued to work to enable the financial system to adapt to secular trends. The FSB has done so in three ways. First, by taking forward the Roadmap for Enhancing Cross-Border Payments, with the focus now being on three  priority areas, cooperating closely with the private sector. Second, by developing a comprehensive framework for the regulation, supervision of oversight of crypto-assets activities and markets. Third, by working to address financial risks from climate change through enhancements to disclosures, data, vulnerabilities assessment and regulatory and supervisory policy. Work in all these areas will continue under the Indian G20 Presidency in 2023.

The letter outlines the reports being submitted to the November Summit, which cover:

  • Policy proposals to address systemic risk in NBFI

  • Key performance indicators to achieve targets for enhancing cross-border payments

  • Scenario analysis of climate-related financial risks to better understand the financial risks associated with transition to net zero

The FSB Chair asks for the G20’s continued and reinforced support for the work of the FSB to strengthen the resilience of the financial system as a whole. The challenges that lie ahead make global cooperation on financial stability matters as important now as it was after the global financial crisis, when the decisions of G20 Leaders triggered reforms that, coordinated through the FSB, have made the global financial system more resilient and growth-enhancing.