Prominent on the Financial Stability Board’s 2019 agenda are the role of big technology firms in financial services and the growth of shadow banking, Federal Reserve Vice Chairman for Supervision Randal Quarles said in a speech in Germany today.
Speaking as chairman of the FSB—the Basel, Switzerland-based body of national-level regulators that monitors global financial risks—Quarles emphasized that the growing role of big tech companies like Facebook, Amazon and Apple in payments, credit and other financial services has potential to increase speed, efficiency and consumer convenience, but that the FSB is also watching for “novel fragilities.”
He added that shadow banking—or, as the FSB is now calling it, “nonbank financial intermediation”—is also of growing concern to the FSB. “Even though the core of the financial system is much more resilient than before the global financial crisis, with strengthened bank capital and liquidity requirements, nonbank financing has been a source of systemic risk.”
