Global Monitoring Report on Non-Bank Financial Intermediation 2018

4 February 2019 | PDF full text (3 MB)

The Global Monitoring Report on Non-Bank Financial Intermediation 2018 presents the results of the FSB’s annual monitoring exercise to assess global trends and risks from non-bank financial intermediation.

The annual monitoring exercise is part of the FSB’s policy work to enhance the resilience of non-bank financial intermediation. It focuses on those parts of non-bank financial intermediation that perform economic functions which may give rise to bank-like financial stability risks (i.e. the narrow measure of non-bank financial intermediation).

Monitoring aggregates at end-2017: Narrowing down

Section 1 introduces the FSB’s monitoring approach, including its scope, data, and terminology. It also describes recent innovations in non-bank financial intermediation.

Section 2 provides an overview of the size and growth of all sectors in the financial system. Among them, “Other Financial Intermediaries” (OFIs) aggregate, which includes all financial institutions that are not central banks, banks, insurance corporations, pension funds, public financial institutions or financial auxiliaries, grew by 7.6% in 2017 OFIs’ growth exceeded that of banks, insurance corporations and pension funds. With $116.6 trillion, OFI assets represent 30.5% of total global financial assets, the largest share on record. Among the OFI sub-sectors, in 2017 structured finance vehicles grew for the first time since the 2007-09 global financial crisis.

Section 3 assesses the interconnectedness between non-bank financial entities and banks and among non-bank financial entities and cross-border linkages. In aggregate, banks and OFIs have become marginally more interconnected through credit and funding relationships in 2017, at levels similar to 2003-06. Investment funds and money market funds are the largest OFI sub-sectors that provide credit to banks.

Interconnectedness among sectors: aggregate linkages among sectors

Section 4 focuses on those parts of non-bank financial intermediation where bank-like financial stability risks may arise. The narrow measure of non-bank financial intermediation, which reflects an activity-based “economic function” assessment of risks, grew by 8.5% to $51.6 trillion in 2017, at a slightly slower pace than 2011-16. Since 2011, the Cayman Islands, China, Ireland and Luxembourg together have accounted for over two-thirds of the dollar value increase. The narrow measure represents 14% of total global financial assets. Key components include:

  • Collective investment vehicles (CIVs) with features that make them susceptible to runs continued to drive the overall growth of the narrow measure in 2017. They grew by 9.1%, a somewhat slower pace than annual growth during 2011-16 (13.2%). Together, CIV assets represent 71% of the narrow measure. The CIVs included in the narrow measure invest mostly in credit assets and are involved in liquidity transformation.

  • Non-bank financial entities engaging in loan provision that is dependent on short-term funding grew by 6% in 2017, and account for 7% of the narrow measure. This category largely consists of finance companies, which were found to employ some degree of leverage, and in some jurisdictions, a high degree of maturity transformation. Finance companies in a few jurisdictions also displayed high liquidity risk.

  • Market intermediaries that depend on short-term funding or secured funding of client assets grew by 5%, and make up 8% of the narrow measure. Broker-dealers constitute the largest entity type in this category. Reflecting their business models, broker-dealers in some jurisdictions continue to employ significant leverage, although it is considered to be lower than the level seen prior to the 2007-09 global financial crisis.

  • Securitisation-based credit intermediation increased by 9% in 2017, to account for 10% of the narrow measure, primarily driven by growth in trust company assets and securitisations.

Moving from MUNFI to the narrow measure: 29-Group at end-2017

Section 5 features case studies that discuss various aspects of non-bank financial entities and activities in greater detail, including: (i) FinTech credit; (ii) recent developments in the leveraged loan markets and the role of non-bank financial intermediaries; (iii) the non-bank credit cycle; (iv) cross-border movements of non-bank financial intermediation systems; and (v) the use of credit default swaps by non-bank financial institutions in the European Union.

Datasets from the report are publicly available for use in accordance with the FSB’s normal terms and conditions.

FSB publishes Global Monitoring Report on Non-Bank Financial Intermediation 2018

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Ref no: 1/2019

The Financial Stability Board (FSB) today published the Global Monitoring Report on Non-Bank Financial Intermediation 2018. The report presents the results of the FSB’s eighth annual monitoring exercise that assesses global trends and risks from non-bank financial intermediation. It covers data up to end-2017 from 29 jurisdictions, which together represent over 80% of global GDP.

The annual monitoring exercise is part of the FSB’s strategy to enhance the resilience of non-bank financial intermediation. As in previous years, the exercise compares the size and trends of financial sectors in aggregate and across jurisdictions based primarily on sectoral balance sheet data. It focuses on those parts of non-bank financial intermediation that perform economic functions which may give rise to bank-like financial stability risks (i.e. the narrow measure of non-bank financial intermediation).

The main findings from the 2018 monitoring exercise include:

  • The narrow measure of non-bank financial intermediation grew by 8.5% to $51.6 trillion in 2017, a slightly slower pace than from 2011-16. Since 2011, the Cayman Islands, China, Ireland and Luxembourg together have accounted for over two-thirds of the dollar value increase. The narrow measure represents 14% of total global financial assets.

    • Collective investment vehicles (CIVs) with features that make them susceptible to runs continued to drive the overall growth of the narrow measure in 2017. They grew by 9.1%, a somewhat slower pace than during 2011-16. Together, CIV assets represent 71% of the narrow measure. They invest mostly in credit assets and are involved in liquidity transformation.

    • Non-bank financial entities engaging in loan provision that is dependent on short-term funding grew by 6% in 2017, to account for 7% of the narrow measure. This category largely consists of finance companies, which employ a somewhat elevated degree of leverage and, in some jurisdictions, a high degree of maturity transformation. Finance companies in a few jurisdictions also displayed high liquidity risk.

    • Market intermediaries that depend on short-term funding or secured funding of client assets grew by 5%, to make up 8% of the narrow measure. Broker-dealers constitute the largest entity type in this category. Reflecting their business models, broker-dealers in some jurisdictions continue to employ significant leverage, although it is considered to be lower than the level seen prior to the 2007-09 global financial crisis.

    • Securitisation-based credit intermediation increased by 9% in 2017, to account for 10% of the narrow measure, primarily driven by growth in trust company assets and securitisations.

  • In 2017, the wider “Other Financial Intermediaries” (OFIs) aggregate, which includes all financial institutions that are not central banks, banks, insurance corporations, pension funds, public financial institutions or financial auxiliaries, grew by 7.6% to $116.6 trillion in 21 jurisdictions and the euro area, growing faster than the assets of banks, insurance corporations and pension funds. OFI assets represent 30.5% of the total global financial assets, the largest share on record. Among the OFI sub-sectors, structured finance vehicles grew in 2017 for the first time since the financial crisis.

  • Investment funds and money market funds are the largest OFI sub-sectors that provide credit to banks. In aggregate, banks and OFIs have become marginally more interconnected through credit and funding relationships in 2017, remaining around 2003-06 levels.

Randal K. Quarles, FSB Chair, said: “Non-bank financing is a valuable alternative to bank financing for many firms and households. Of course, when it involves maturity or liquidity transformation, or leverage like banks, it may have effects on financial stability both directly and through its linkages with the banking system. The FSB’s monitoring exercise draws on the strength of the FSB’s broad-based and diverse membership to facilitate the sharing of information about these developments among authorities and helps to identify potential sources of financial stability risk. In this way, it contributes to harnessing the benefits of non-bank financing while containing associated risks.”

Klaas Knot, Chair of the FSB Standing Committee on Assessment of Vulnerabilities, said: “Non-banks play a growing role in the financial system, and their share of the financial system is the largest on record. They are becoming important players in areas where banks traditionally have played dominant roles. Authorities need to remain vigilant in addressing financial stability risks that emerge as a result of non-bank financing through enhanced data collection, improved risk analysis and implementing appropriate policy measures, including the FSB’s policy recommendations for addressing structural vulnerabilities from asset management activities.”

Notes to editors

In response to a G20 Leaders’ request at the Seoul Summit in 2010, the FSB adopted a two-pronged strategy to address the financial stability risks in non-bank financial intermediation (previously called shadow banking). First, the FSB created a system-wide monitoring framework to track developments in non-bank financial intermediation with a view to identifying the build-up of systemic risks and initiating corrective actions where necessary. Second, the FSB has been coordinating and contributing to the development of policies in five areas where oversight and regulation needed to be strengthened to mitigate the potential systemic risks associated with non-bank financial intermediation, with a focus on measures that seek:

  • to mitigate the spill-over effect between the banking system and non-bank financial intermediation;

  • to reduce the susceptibility of money market funds to “runs”;

  • to improve transparency and to align incentives associated with securitisation;

  • to dampen pro-cyclicality and other financial stability risks associated with securities financing transactions; and

  • to assess and mitigate financial stability risks posed by other non-bank financial intermediation.

In October 2018, the FSB announced its decision to replace the term “shadow banking” with the term “non-bank financial intermediation” in future communications, including this report. The change in terminology is intended to emphasise the forward-looking aspect of the FSB’s work to enhance the resilience of non-bank financial intermediation and clarify the use of the technical terms.

The change in terminology does not affect the substance or coverage of the agreed monitoring framework and policy recommendations, which aim to address bank-like financial stability risks arising from non-bank financial intermediation (i.e. maturity/liquidity transformation, leverage and/or imperfect credit risk transfer).

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 Randal K. Quarles, Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

Call for papers: 2019 Annual Meeting of the Central Bank Research Association (CEBRA)

18 January 2019

The FSB seeks academic paper submissions for a plenary session on the ‘Post-implementation Evaluations of the G20 Financial Regulatory Reforms’ at the 2019 Annual Meeting of CEBRA. The conference is co-organised by the School of International and Public Affairs at Columbia University, the Federal Reserve Bank of New York and the research centre for Sustainable Architecture for Finance in Europe (SAFE) at Goethe University and will take place at Columbia University in New York on 19-20 July 2019.

The FSB is supporting the full, timely and consistent implementation of the G20 financial regulatory reforms designed to increase the resilience of the global financial system while preserving its open an integrated structure. To this end, the FSB has developed a framework for the post-implementation evaluation of the effects of reforms. The framework aims to guide analyses of whether the G20 reforms are achieving their intended outcomes, and to help identify any material unintended consequences that may have to be addressed, without compromising on the objectives of the reforms. The plenary session will provide an opportunity to showcase examples of such evaluation studies.

Authors are invited to submit papers on the post-implementation evaluation of the G20 financial regulatory reforms. The topics of interest include the core areas of the G20 financial regulatory reform agenda:

  • making financial institutions more resilient (including Basel III);

  • ending too-big-to-fail, including resolution regimes, total loss-absorbing capacity, and global systemically important financial institutions;

  • making derivatives markets safer (including over-the-counter derivative reforms); and

  • enhancing the resilience of non-bank financial intermediation.

Other topics of interest include the effects of reforms on financial intermediation and papers on methodological approaches relevant for the evaluations and theoretical and empirical work on the social costs and benefits of financial regulatory reforms.

Papers should be submitted via the SAFE website by 2 February 2019.

Fiscal Transparency Code

1 January 2019

View the Standard

The IMF has for many years been at the forefront in promoting fiscal transparency as a critical element of effective fiscal policy making and accountability, and a key aspect of good governance. In 2014, the IMF released a revamped Fiscal Transparency Code (the Code), which is the global standard for disclosure of information about public finances, and replaced the 2007 Code and the related Fiscal Module of the Reports on the Observance of Standards and Codes (fiscal ROSC). In 2019, transparency practices in resource revenue management were finalized and added to the Code. The Code and evaluation reflect the lessons of the global financial crisis, incorporate developments in international standards, and build on feedback from stakeholder consultations.

Fiscal transparency – the comprehensiveness, clarity, reliability, timeliness, and relevance of public reporting on the past, present, and future state of public finances – is critical for effective fiscal management and accountability. Fiscal transparency allows for a better-informed debate by both policymakers and the public about the design and results of fiscal policy, and helps establish accountability for its implementation. It helps to highlight risks to the fiscal outlook, allowing an earlier and smoother fiscal policy response to changing economic conditions and thereby reducing the incidence and severity of economic crises. The degree of fiscal transparency can also help provide a sense of a country’s fiscal credibility and plays a role in how financial markets view the country’s fiscal track record. The loss of market confidence in governments with underestimated or hidden deficits in the wake of the recent financial crisis underscored the importance of fiscal transparency to global financial and economic stability.

The IMF’s Fiscal Transparency Code is the international standard for disclosure of information about public finances. The Code comprises a set of principles built around four pillars:

  • Fiscal reporting (Pillar I): Fiscal reports should provide a comprehensive, relevant, timely, and reliable overview of the government’s financial position and performance.
  • Fiscal forecasting and budgeting (Pillar II): Budgets and their underlying fiscal forecasts should provide a clear statement of the government’s budgetary objectives and policy intentions, and comprehensive, timely, and credible projections of the evolution of the public finances.
  • Fiscal risk analysis & management (Pillar III): Governments should disclose, analyze, and manage risks to the public finances and ensure effective coordination of fiscal decision-making across the public sector.
  • Resource revenue management (Pillar IV): Government revenues from natural resource exploration and extraction activity should be collected, managed, and disbursed in an open and transparent manner.

Assessment Methodology

View the Assessment Methodology

Fiscal Transparency Evaluations (FTEs) are the IMF’s fiscal transparency diagnostic. For each transparency principle, the Code differentiates between basic, good, and advanced practices to provide countries with clear milestones toward full compliance with the Code. Specifically, FTEs provide countries with:

  • a comprehensive assessment of their fiscal transparency practices against the differentiated standards set by the Code;
  • rigorous analysis of the scale and sources of fiscal vulnerability based on a set of fiscal transparency indicators;
  • a visual account of their fiscal transparency strengths and reform priorities through summary heat maps;
  • a sequenced fiscal transparency action plan to help them address those reform priorities; and
  • the option of undertaking a modular assessment focused on just one Pillar of the Code.

A Fiscal Transparency Handbook was issued in April 2018, providing more detailed guidance on implementation of the new Fiscal Transparency Code’s principles and practices, illustrated by examples from countries around the globe. The Handbook covers the Code’s first three pillars and replaces the 2007 Manual on Fiscal Transparency. A second volume covering Pillar IV will be issued at a later stage.

FSB RCG for Sub-Saharan Africa discusses financial vulnerabilities, effects of reforms and cyber security

11 December 2018

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Ref no: 54/2018

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for Sub-Saharan Africa held its 14th meeting in Johannesburg today hosted by the South African Reserve Bank.

Members of the Group began the meeting with a discussion of global and regional macroeconomic and financial market developments and their potential impact on economies in the region. Members highlighted potential financial stability risks against the backdrop of tightening global financing conditions, market and exchange rate volatility and the decline in commodity prices, and exchanged views on possible policy responses.

The Group received an update on the FSB’s work in 2018, including reports delivered to the G20 Leaders’ Summit in Buenos Aires, and its future work programme. The FSB’s work in 2019 and beyond will focus on (i) finalising and operationalising post-crisis reforms; (ii) monitoring the implementation and evaluating the effects of post-crisis reforms; and (iii) addressing new and emerging vulnerabilities in the financial system.

The Group then discussed financial sector resilience 10 years after the global financial crisis. The FSB’s annual report on the implementation and effects of G20 reforms reports that the new regulatory framework is largely in place and implementation is well underway. However, it remains uneven across jurisdictions. In light of these conclusions, the members discussed current challenges in implementing post-crisis regulatory frameworks in sub-Saharan Africa.

RCG members then shared recent experiences in managing capital flows in the region and considerations in selecting the appropriate policy measures to address risks that may emerge with such flows, including the use of macroprudential policies. Members noted the importance of continued vigilance given the potential for outflows to increase against the backdrop of tightening global financial conditions.

Cyber incidents pose a threat to the financial system and therefore members highlighted regulatory and supervisory steps they have taken to facilitate both the mitigation of cyber risk and effective response to, and recovery from, cyber incidents.

The use of technology by authorities for the purpose of supervising markets and market participants (‘SupTech’) has the potential to improve the efficiency and effectiveness of regulatory, supervisory and oversight functions. By the same token, financial institutions can employ technology for the purpose of meeting regulatory requirements efficiently (‘RegTech’).  Members discussed the current use of these technologies in sub-Saharan Africa and the impact they are having on supervisory practices and efforts to maintain financial stability.

The FSB RCG for Sub-Saharan Africa is co-chaired by Lesetja Kganyago, Governor, South African Reserve Bank and Moses Pelaelo, Governor, Bank of Botswana. Membership includes financial authorities from Angola, Botswana, Ghana, Kenya, Mauritius, Namibia, Nigeria, South Africa, and Tanzania, as well as the Central Bank of West African States (BCEAO) and the Bank of Central African States (BEAC). Permanent observers include the Committee of Central Bank Governors of the Southern African Development Community, and the East African Community. Uganda and Zambia participated in the meeting for the first time as members.

Notes to editors

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

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 Randal K. Quarles, Governor and Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and sub-Saharan Africa. [←]

Eighth meeting of the Financial Stability Board Regional Consultative Group for the Commonwealth of Independent States

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Ref no: 53/2018

Today, the Central Bank of Armenia hosted the eighth meeting of the Financial Stability Board (FSB) Regional Consultative Group for the Commonwealth of Independent States (RCG for the CIS) in Yerevan.

Members of the RCG for the CIS were informed of the main outcomes of the FSB and G20’s work in 2018 and policy priorities for 2019. At present, the FSB is turning its attention to the monitoring of implementation of the regulatory reforms and analysis of their impact on international financial system stability. In 2018 the FSB evaluated the effects of the reforms on incentives to centrally clear over-the-counter derivatives and on infrastructure investment finance. Both evaluations found that, overall, the effects of the reforms were positive. This conclusion is supported by positive developments in the global financial system, notably an increase in the sustainability of growth, the resumption of credit growth and an increase in the share of over-the-counter derivatives contracts that are centrally cleared. Conversely, the global economic outlook is being put under pressure through a widening of sovereign and corporative bond yields, rising interest rates and inflation expectations in some advanced economies, exchange rate depreciation in developing economies and geopolitical risks.

Members also discussed developments in the global financial markets and their impact on national economies. It was observed that the main vulnerabilities in many CIS countries are persistent current account deficits, insufficient levels of international reserves and high levels of public and private sector debt. These factors can be triggered by the tightening of monetary policy in some advanced economies, escalating trade disputes, and general policy uncertainty that may accelerate capital outflows from emerging market and developing economies, including the CIS. To minimise such risks members said that it is important to restore economic policy space, continue structural reforms aimed at increasing growth and strengthen oversight of public and private sector debt (especially those denominated in foreign currency).

Members expressed great interest in risks arising from the use of financial technology (FinTech). The FSB report on Crypto-asset markets: markets: Potential channels for future financial stability implications was discussed by members and it was concluded that understanding risks remains a challenge, but that the very low volumes of crypto-assets both globally and in the region do not give rise to material  financial stability risks at this time. Nevertheless, further developments should be monitored and may require the coordination of policy measures at the global level, including consumer and investor protection, and anti-money laundering and combating the financing of terrorism regulation and supervision. Members will discuss this matter at future meetings.

The Group discussed approaches to mitigate cyber security risks confronted by financial institutions. In particular, they considered regulatory and supervisory steps taken by authorities to facilitate both the mitigation of cyber security risk by financial institutions and their effective response to, and recovery from, cyber security incidents. During their exchange of views, members recognised the importance of ex ante contingency plans for cyber incidents, information sharing and monitoring.

The meeting was concluded with a discussion of financial stability and its role in the mandate of a central bank. Members recalled that, prior to the crisis, monetary and financial stability were frequently thought of separately; this is no longer the case. In this context, they noted that financial stability has a macroprudential or systemic dimension that cannot be ignored and that in some jurisdictions this may give rise to institutional challenges. Members of the RCG for the CIS agreed to conduct a study on the role of financial stability in the mandate of the central bank and its analytical framework, including a survey of central bank policies and a stocktake of international practices. The Group will issue a report summarising its findings and offering recommendations.

The RCG for the CIS is co-chaired by Deputy Minister Sergey Storchak, Ministry of Finance of the Russian Federation, and Deputy Governor Nerses Yeritsyan, Central Bank of Armenia. The membership includes financial authorities from Armenia, Belarus, Kazakhstan, Kyrgyz Republic, Russia and Tajikistan. Switzerland and the Eurasian Economic Commission are invited to the meetings of the RCG for the CIS as permanent observers.

Notes to editors

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

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 Randal K. Quarles, Governor and Vice Chairman for Supervision, US Federal Reserve; its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. The FSB Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and Sub-Saharan Africa. [←]

FSB RCG for the Americas assesses financial market developments and discusses effects of reforms, FinTech and crypto-assets

6 December 2018

Press enquiries:
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[email protected]
Ref no: 52/2018

The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Americas met in the Cayman Islands today.

Members of the FSB RCG for Americas began the meeting with a discussion of global and regional macroeconomic and financial market developments. The financial system is substantially more resilient in the region as a result of regulatory reforms, with large banks less leveraged and more liquid than before the global financial crisis. Nevertheless supervisors are closely monitoring current potential vulnerabilities, including the growth of leveraged loans. More generally, the FSB will continue to monitor financial stability risks relating to high sovereign, corporate and household debt levels and to assess the resilience of evolving market structures and the impact of technological innovation.

The group received an update on the FSB’s work in 2018, including reports delivered to the G20 Leaders’ Summit in Buenos Aires and its future work programme. The FSB’s annual report on the implementation and effects of G20 reforms reports that, 10 years after the crisis, the new regulatory framework is largely in place and implementation is well underway. However implementation is not yet complete and remains uneven. The FSB’s work in 2019 and beyond will focus on (i) finalising and operationalising post-crisis reforms; (ii) monitoring the implementation and evaluating the effects of post-crisis reforms; and (iii) addressing new and emerging vulnerabilities in the financial system.

The group discussed financial sector resilience 10 years after the global financial crisis, the implementation of regulatory reforms and the remaining issues that need to be addressed in the region. They noted that many jurisdictions in the region that are not members of the Basel Committee on Banking Supervision (BCBS) had improved macroprudential frameworks and deposit insurance regimes, but that further steps are needed, including with respect to the reforms implemented by BCBS members, taking into account proportionality strategies while still achieving full implementation.

Members then discussed crypto-assets and the FSB’s assessment that, while crypto-assets do not pose a material risk to global financial stability at this time, they do raise several broader policy issues in areas such as consumer and investor protection, market integrity, tax evasion and money laundering/terrorist financing.

Discussion then turned more broadly to the use of FinTech, its potential to increase financial inclusion, including through digital payments, and the regulatory and supervisory challenges FinTech poses.

The meeting ended with a discussion of infrastructure finance. A priority of the Argentine G20 Presidency has been to make infrastructure finance into a new asset class. The FSB’s recently published evaluation of the effects of the reforms on infrastructure finance found that the effects of G20 financial reforms on infrastructure finance are of a second order relative to other factors.

The FSB RCG for the Americas is co-chaired by Guido Sandleris, Governor, Central Bank of Argentina and John Rolle, Governor, Central Bank of The Bahamas. Membership includes financial authorities from Argentina, Bahamas, Barbados, Bermuda, Bolivia, Brazil, British Virgin Islands, Canada, Cayman Islands, Chile, Colombia, Costa Rica, Guatemala, Honduras, Jamaica, Mexico, Panama, Paraguay, Peru, the United States of America and Uruguay.

Notes to editors

The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.1 Typically, each Regional Consultative Group meets twice each year.

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 Randal K. Quarles, Governor and Vice Chairman for Supervision, US Federal Reserve, and its Vice Chair is Klaas Knot, President, De Nederlandsche Bank. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.

  1. The FSB Regional Consultative Groups cover the following regions: Americas, Asia, Commonwealth of Independent States, Europe, Middle East and North Africa, and Sub-Saharan Africa. [←]

Fifth FSB Annual Report

1 December 2018 | PDF full text (685 KB)

This fifth annual report provides an update on the key activities of the FSB and its audited annual financial statements for the 12-month period ended 31 March 2018.

The report provides an update on the FSB’s work as it pivoted from a primary focus on new policy development towards evaluating policies that have been implemented and addressing any unintended consequences. It provides an update on the activities, publications and decisions by the FSB during the course of the year, and sets out details on the FSB’s governance.

The FSB separately publishes an annual report for G20 Leaders on the implementation and effects of the agreed post-crisis international regulatory financial reforms. The most recent version of which was published in November 2018 and delivered to the G20 Leaders’ Summit in Buenos Aires.

Implementation and Effects of the G20 Financial Regulatory Reforms: Fourth Annual Report

28 November 2018 | PDF full text (2 MB)

This is the fourth annual report on the implementation and effects of the G20 financial regulatory reforms. Ten years after the crisis, the report highlights the progress made in the reform agenda as the FSB pivots towards implementation and rigorous evaluation. Looking ahead, the report highlights some challenges in promoting a financial system that supports the G20’s objective of strong, sustainable and balanced growth, while preserving open and integrated markets and adapting to rapid technological change.

The report documents the substantial progress that has been made in implementing key post-crisis financial reforms; discusses how the reforms have contributed to the core of the financial system becoming more resilient to economic and financial shocks; describes the FSB’s work to evaluate whether reforms are working as intended; lays out why preserving financial stability, and supporting sustainable growth, requires the continued monitoring of developments in the global financial system; and documents the benefits of cooperation between jurisdictions in the aftermath of the crisis.

The report, which was delivered to the G20 Summit in Buenos Aires, calls for the support of G20 Leaders in implementing the agreed reforms, and reinforcing global regulatory cooperation.

The report includes a colour-coded table that summarises the status of implementation across FSB jurisdictions for priority reform areas.

Implementation of reforms in priority areas by FSB jurisdictions

The FSB is now pivoting towards dynamic implementation of the G20 reforms and rigorous evaluations of their effects in order to support the provision of financial services to the real economy. The FSB will also continue to monitor financial stability risks relating to high sovereign, corporate and household debt levels in many parts of the world, and to assess the resilience of evolving market structures and the impact of technological innovation.

Implementation and Effects of the G20 Financial Regulatory Reforms – Dashboard

| PDF full text (306 KB)

The FSB’s fourth annual report to the G20 summarises in a colour-coded table the status of implementation across FSB jurisdictions for priority reform areas. This ‘dashboard’ was included in the report.