This letter from the FSB Chair, Klaas Knot, to G20 Finance Ministers and Central Bank Governors ahead of their meeting on 23-24 October focuses the FSB’s work to harness the benefits and respond to the challenges of technological innovation. The letter covers:
Depositor behaviour and interest rate and liquidity risks in the financial system
The March 2023 banking turmoil illustrated the role that technological advancements can play in accelerating the propagation of shocks. The letter covers the FSB’s analysis on the role of technology, social media, and interest rates on depositor behaviour and deposit ‘stickiness’. The report will be submitted to the G20 ahead of this meeting.
Cyber and operational resilience
Cyber and operational risks to financial stability were illustrated by the CrowdStrike outage and by operational disruptions in high-value messaging and payments systems in July. To facilitate efficient and effective response and recovery from operational this, the FSB is delivering, for public consultation, a common Format for Incident Reporting Exchange (FIRE).
Crypto-assets
The FSB’s status report outlines the progress made by jurisdictions in implementing the global regulatory framework for crypto-asset policy and regulatory responses developed by the IMF, FSB and standard-setting bodies.
Tokenisation
The FSB’s report on the financial stability implications of tokenisation outlines steps that authorities and international bodies should consider to address data gaps in monitoring tokenisation adoption; increase understanding of how its features fit into legal and regulatory frameworks and supervisory approaches; and facilitate cross-border information sharing.