Financial Stability Board Financial News

FCA CEO Nikhil Rathi noted the regulator had observed the rapid growth of the private markets, as well as the use of leverage in the private equity sector in particular.

The FSB and IOSCO, whose members pledge to implement agreed-upon regulations in their respective national guidelines, said they intend to evaluate by 2028 whether the changes address risks to financial stability.

According to the BIS, leveraged funds have built up net short positions in US Treasury future of around $600m in recent months.

The incoming deputy governor of financial stability at the Bank of England (BoE) has said that crypto does not yet pose much of a risk to financial stability.

The release of a paper that synthesised separate recommendations by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to coordinate measures to stop crypto assets from undermining macroeconomic and financial stability was advanced by about a month so that G20 members could form their assessment on that before the Leadership Summit on September 9-10, he said. The paper, released on September 7, has endorsed regulation of crypto assets, instead of a blanket ban, saying the prohibition could be «costly and technically demanding to enforce». It, however, acknowledged that widespread adoption of crypto assets «could undermine the effectiveness of monetary policy, circumvent capital flow management measures, exacerbate fiscal risks, divert resources available for financing the real economy, and threaten global financial stability». While the paper's recommendations could serve as global baseline standards for crypto regulations, it has left the scope for countries to put in place additional restrictions based on their perception of risks.The Delhi G20 declaration lauded the synthesis paper, which included a road map for supporting a «coordinated and comprehensive policy and regulatory framework taking into account the full range of risks». «Our finance ministers and central bank governors will discuss taking forward the road map at their meeting in October 2023,» it added.

IMF) and the Financial Stability Board (FSB) has set out a roadmap to coordinate measures to stop crypto assets from undermining macroeconomic and financial stability. However, the synthesis, put together at the request of the Indian G20 presidency, stopped short of endorsing a blanket ban on such assets, saying it can be “costly and technically demanding to enforce”. The crypto asset regulation is a key part of the agenda for G20 leaders when they meet in New Delhi this weekend. The IMF-FSB Synthesis Paper: Policies for Crypto-Assets provides comprehensive guidance to address the macroeconomic and financial stability risks posed by crypto-asset activities and markets, including those associated with stablecoins and those conducted through so-called decentralised finance (DeFi).

'There will certainly be further challenges and shocks facing the global financial system in the months and years to come.'

India assumed the presidency of the G20. India had already bolstered its international reputation with its vaccine diplomacy, by playing a constructive role in climate change discussions, and by being the fastest-growing economy. For its presidency, India adopted the ancient Sanskrit shloka «Vasudhaiva Kutumbakam,» signifying «One Earth, One Family, One Future,” as its theme.

Finance ministers representing some of the world’s seven most influential economies discussed their commitment to regulating crypto-assets and exploring central bank digital currencies during a Saturday meeting in Japan.

The lack of international cooperation has made it challenging for regulators to effectively govern the sector. Different countries have their own approaches to regulation, leading to a patchwork of regulations that can be confusing for investors and businesses alike. However, recent developments suggest that international cooperation may be on the horizon.