FSB Chair Pens Letter Concerning Financial Stability Challenges2022-10-11
In anticipation of G20 meeting on October 12-13, 2022, in Afghanistan, the Financial Stability Board (FSB) Chair, Klass Knot, drafted a letter to the G20 Finance Ministers and Central Bank Governors regarding challenges to global financial stability. Since the Chair’s previous letter on financial challenges that was released in July, financial conditions have intensified with inflation increasing, issues related commodity markets or hidden leverage growing, and other vulnerabilities contributing to a weakening economic outlook.
The letter maintains that the FSB will continue to work on addressing these issues including a November progress report on strengthening the resilience of non-bank financial intermediation. Other reports on a regulatory framework for crypto-assets, improving cross-border payments, cyber risks, and climate-related financial risks will be made available for the G20 meeting in Afghanistan. The letter also mentions work on “Interoperability between the common global baseline and national and regional jurisdiction-specific requirements”, in addition to a publication of an October 13 status report on the FSB’s Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations. The ISSB rely upon the TCFD's recommendations for its accounting standards, as well as by most FSB jurisdictions as a reference point. The letter also urges action by companies to improve disclosures related to climate-related financial risks.
On October 13, the FSB further plans to release two reports on climate-related financial risks. One report will involve the FSB's recommendations on supervisory and regulatory approaches to climate-related risks subject to stakeholder comments from a public consultation, and the second report will discuss useful and consistent climate-related disclosures.
More information on the FSB’s work on financial stability challenges and the Chair’s letter is available here.