FSB Chair sets out FSB work on AI and stablecoins

9 October 2026

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Ref: 12/2026

  • Letter by FSB Chair, Andrew Bailey, introduces the reports being delivered at the request of the US G20 Presidency, covering artificial intelligence, regulatory and supervisory modernisation, implementation monitoring and public sector backstop funding.
  • The letter, to G20 Finance Ministers and Central Bank Governors, notes current market conditions and risks associated with artificial intelligence and calls for continued vigilance in safeguarding financial stability.
  • The letter is accompanied by a summary of FSB work on cross-border vulnerabilities of global stablecoin arrangements.

The Financial Stability Board (FSB) today published a letter from its Chair, Andrew Bailey, to G20 Finance Ministers and Central Bank Governors, ahead of their meeting on 15 October.

The letter highlights risks to the global financial system, including heightened volatility in sovereign bond markets, vulnerabilities in private credit markets and risks related to artificial intelligence (AI). It is accompanied by a note on global stablecoin arrangements, which summarises ongoing work at the FSB on vulnerabilities related to global stablecoin arrangements along with data for their financial stability monitoring. The note outlines further work that could help authorities assess, identify, and monitor potential financial stability vulnerabilities related to global stablecoin arrangements. This includes enhancing the monitoring of cross-border vulnerabilities and supporting implementation of the 2023 recommendations, particularly by fostering cross-border cooperation and information sharing.

The letter also introduces the other reports the FSB is submitting to the G20, including:

  • Thematic peer review on public sector backstop funding mechanisms, which identifies gaps in the implementation of public sector backstop funding mechanisms to provide temporary support to banks in resolution.
  • Consultation report on regulatory and supervisory modernisation, which sets out high-level principles which will help FSB members pursue more effective, efficient, risk-focused and forward-looking regulatory and supervisory frameworks.
  • Finalised sound practices for responsible adoption of artificial intelligence (AI), incorporating feedback from the public consultation. The rapid pace of development means that focusing on safe adoption of AI across the financial system will remain an important feature of the FSB’s agenda next year.
  • G20 Implementation Monitoring Review, a follow-up to the October 2025 Interim Review, which assesses the extent to which the FSB’s policy design process facilitates effective implementation of agreed policies.

Notes to editors

In 2025, the South African G20 Presidency asked the FSB to review how it promotes and monitors implementation of G20 financial sector reforms. To undertake this work, the FSB established an IMR working group led by an external Chair, Randal K. Quarles (former FSB Chair and Vice Chair for Supervision of the Federal Reserve Board), and supported by a small team of senior members of the FSB.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Andrew Bailey, Governor of the Bank of England. The FSB Secretariat is located in Basel, Switzerland and hosted by the Bank for International Settlements.

FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: October 2026

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The pace of change in the financial system continues to accelerate. New technologies and shifting market structures bring important opportunities, but they also require vigilance, agility and international cooperation.

This letter was submitted to G20 Finance Ministers and Central Bank Governors ahead of their meeting on 15 October 2026.

Andrew Bailey calls for continued vigilance in addressing the many risks to the global financial system. These include heightened volatility in sovereign bond markets, vulnerabilities in private credit markets; and risks associated with artificial intelligence (AI).

The letter introduces the reports that the FSB is delivering to the G20, namely:

  • Cross-border Vulnerabilities and Financial Stability Monitoring of Global Stablecoin Arrangements, published today with the Chair’s letter;
  • Thematic Review on Public Sector Backstop Funding, published on 9 October;
  • Sound Practices for the Responsible Adoption of AI;
  • Consultation Report on Regulatory and Supervisory Modernisation;
  • G20 Implementation Monitoring Review Report.

Global stablecoin arrangements: Cross-border vulnerabilities and financial stability monitoring

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Global stablecoins are an inherently cross-border and cross-sectoral issue that may give rise to financial stability vulnerabilities.

Global stablecoins, as defined by the FSB, are those that have a reach and use across multiple jurisdictions and could become systemically important in one or more of them. These characteristics may limit the ability of a single jurisdiction alone to fully assess or address potential cross-border vulnerabilities. Moreover, the activities involved in operating a global stablecoin may span several types of entities and fall under the oversight of multiple national authorities.

This note summarises ongoing work at the FSB on vulnerabilities related to global stablecoin arrangements along with data for their financial stability monitoring. In particular, it includes an analysis of the structure of these arrangements, the potential propagation of vulnerabilities, and the metrics that could support financial stability monitoring. It also looks at the data currently available for financial stability monitoring of stablecoin activities, assessing the sources as well as the benefits and limitations of these data sources.

FSB report assesses jurisdictions on public sector backstops

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Ref: 11/2026

  • Credible public sector backstop funding mechanisms are necessary, as a last resort, to achieve orderly resolution.
  • Review finds that while significant progress has been made, further work is needed in a majority of jurisdictions to be ready, if necessary, to provide public funding to a systemic bank that goes into resolution.
  • FSB recommends jurisdictions take action to ensure that arrangements are in place before a crisis, rather than improvised under pressure.

The Financial Stability Board (FSB) today published a Thematic Review on Public Sector Backstop Funding (PBFs) Mechanisms. The review forms part of work initiated after the 2023 bank failures. The 2023 bank failures demonstrated how quickly a bank can experience acute liquidity stress. A PBF mechanism is the last resort if all other sources of liquidity are used up. It is one part of the comprehensive approach to ensuring global systemically important banks (G-SIBs) have reliable access to liquidity in resolution. A credible mechanism can mean failing banks don’t have to be taken into public ownership.

The review did not assess the full range of resolution powers and tools, focusing instead on public sector liquidity provision as a last resort. Fifteen years after the FSB issued its recommendations on designing a PBF, approximately half of jurisdictions still have material gaps. The review also shows there are multiple ways to design a PBF that can fully meet the FSB’s high standards.

The report recommends that jurisdictions take urgent action to improve their PBF mechanisms. It sets out six recommendations for jurisdictions to achieve full and consistent implementation of the FSB Recommendations. The report also recommends that the FSB supports member jurisdictions in implementing these recommendations by sharing good practices, reviewing and building on existing implementation materials where necessary, and closely monitoring progress in implementing Key Attribute 6 and its Guiding Principles.

Soledad Núñez, Deputy Governor, Banco de España, and Chair of the peer review, said “The FSB has set a demanding but necessary standard for the design of public sector backstops. Having a credible public sector backstop funding mechanism is essential. This report does not assess jurisdictions’ overall ability to respond to financial crises, but it does identify one critical issue that needs addressing. Further work is urgently needed to complete implementation of the FSB’s recommendation on public sector backstops.”

Notes to editors

The FSB adopted the Key Attributes of Effective Resolution Regimes for Financial Institutions in 2011, with the aim of facilitating the resolution of financial institutions without severe systemic disruption or taxpayer losses, while protecting vital economic functions. One element of an effective resolution regime is a public sector backstop funding mechanism, which, if needed as a last resort, can provide temporary funding to firms in resolution to support orderly resolution.

The objective of this review is to examine progress made by FSB member jurisdictions in implementing Key Attribute 6 and the Guiding Principles on the Temporary Funding Needed to Support the Orderly Resolution of a Global Systemically Important Bank (“G-SIB”), which relate to the establishment of public sector backstop funding mechanisms. The review was prepared by a team of experts from FSB member institutions and chaired by Soledad Núñez. Deputy Governor, Banco de España.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Andrew Bailey, Governor of the Bank of England. The FSB Secretariat is located in Basel, Switzerland and hosted by the Bank for International Settlements.

Thematic review on public sector backstop funding mechanisms: Peer review report

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Incomplete implementation of Key Attribute 6 in most jurisdictions remains a material gap that weakens authorities’ ability to resolve systemic banks and could impact global financial stability.

The FSB adopted the Key Attributes of Effective Resolution Regimes for Financial Institutions in 2011, to make it possible to resolve a failing financial institution without severe systemic disruption and without exposing taxpayers to loss, while preserving the institution’s critical functions.

Key Attribute 6 addresses funding in resolution. To the extent a bank’s own resources or market access to funding is not available or sufficient, Key Attribute 6 and its related guidance calls for a credible public sector backstop funding (PBF) mechanism to be in place, as a last resort, to enable the temporary funding needs of the bank to be met. Having such public funding ready in advance helps prevent the disorderly failure of a systemic bank or costly bailouts.

This peer review looks at the implementation of the FSB’s policies related to the establishment of public sector backstop funding mechanisms to provide temporary funding to banks in resolution, if necessary, as a last resort. The peer review evaluates:

  • whether a credible PBF mechanism exists and can deliver temporary liquidity at the scale and speed likely to be needed for an orderly bank resolution;
  • whether tools are in place for taxpayer losses to be recovered; and
  • whether safeguards are in place to contain moral hazard and ensure the last resort nature of such mechanisms.

The review also identifies good practices, lessons and shared challenges for establishing PBF mechanisms and implementing Key Attribute 6 and the Guiding Principles; and makes recommendations addressed to FSB member jurisdictions and the FSB.

FSB Regional Consultative Group for the Americas meets in Mexico City

30 September 2026

The Financial Stability Board (FSB) Regional Consultative Group for the Americas (RCG Americas) convened on 24-25 September 2026 in Mexico City, hosted by the Bank for International Settlements’ Representative Office for the Americas. The meeting brought together senior officials from central banks, financial authorities, and regulatory bodies across the region to discuss key financial stability topics. Co-chaired by Lisa D. Cook, Governor of the US Federal Reserve Board, and Jide Lewis, Deputy Governor of the Bank of Jamaica, the group held a workshop on regional vulnerabilities from extreme weather events.

The meeting addressed a range of issues, including:

  • Global and regional financial vulnerabilities, with a focus on geopolitical uncertainty, extreme weather financial impacts, capital flows, and exchange rates.
  • Cross-border vulnerabilities and regulatory challenges associated with global stablecoin arrangements.
  • The implications of artificial intelligence (AI) and quantum computing for operational resilience and cybersecurity in the financial sector.
  • Regional crisis preparedness, particularly for operational risk events such as cyber incidents and third-party outages.

Members also provided input on the FSB’s 2026 work priorities and discussed how the RCG Americas can contribute to advancing these priorities.

FSB hosts roundtable on public-private sector collaboration to strengthen operational resilience

11 September 2026

The FSB hosted a roundtable in Basel on 10 September, exploring the practical steps to strengthen the preparedness of the financial sector for significant operational disruptions through public-private sector collaboration.

Participants included senior officials from FSB member authorities and stakeholders (e.g. national/regional public-private sector collaboration fora, financial institutions, non-financial sector government agency).

Discussions focussed on:

  1. Building relationships and trust between authorities and firms
  2. Distilling and distributing lessons learned from operational incidents and exercises 
  3. effective practices of public-private sector collaboration;
  4. potential for public-private sector collaboration across sectors and jurisdictions (interoperability); and
  5. potential future challenges in strengthening operational resilience through public-private sector collaboration.

Report of the auditor to FSB Plenary on the financial statements 2025-2026

4 September 2026

FSB Annual Financial Report: 2025-26

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This report contains the audited financial statements of the FSB for the 12-month period from 1 April 2025 to 31 March 2026. It also provides details on the FSB’s governance arrangements and its transparency and accountability mechanisms.

A detailed explanation of the activities undertaken to implement the mandate and tasks of the FSB is provided in the FSB’s Annual Report, which is published separately.

FSB Chair warns of risks arising from frontier Artificial Intelligence (AI) models

31 August 2026

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Ref: 10/2026

  • In his letter to G20 Finance Ministers and Central Bank Governors, FSB Chair, Andrew Bailey, warns of the risks posed by frontier AI models, highlighting in particular their potential impact on cyber risk.
  • Mr Bailey calls on authorities to take appropriate steps to support safe and responsible model release and deployment, and for financial institutions to ensure robust response and recovery capabilities and resilience amongst critical third-party providers.
  • The letter also notes concerns over the increased use of leverage in bond and equity markets, which is interacting with high valuations, market concentration and AI-related optimism in a way that could amplify a future market correction.

The Financial Stability Board (FSB) today published a letter from its Chair, Andrew Bailey, to G20 Finance Ministers and Central Bank Governors ahead of their meeting in Asheville, North Carolina.

Mr Bailey notes that the Middle East conflict has exacerbated energy-driven inflationary pressures. Markets remain vulnerable to a potentially disorderly correction that could spread across borders, particularly given fragilities in sovereign debt markets; vulnerabilities in private credit and stretched asset valuations (particularly AI-related investments). He warns that the recent increase in the use of leverage in equity markets is interacting with high valuations, market concentration and AI-related optimism in a way that could amplify a future market correction.

The risk landscape has been further complicated by the emergence of frontier AI models, which are showing increasingly sophisticated autonomy and problem-solving abilities, as well as threat capabilities. The most immediate concern is the potential impact of frontier AI on cyber risk. Mr Bailey calls on jurisdictions to take appropriate steps to support safe and responsible model release and deployment as a priority. For financial firms, Mr Bailey underlines the importance of robust response and recovery capabilities and resilience amongst critical third-party technology providers and other common service providers.

The FSB is looking at what steps it can take, within its mandate and expertise, to address these challenges.

Notes to editors

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Andrew Bailey, Governor of the Bank of England. The FSB Secretariat is located in Basel, Switzerland and hosted by the Bank for International Settlements.