Financial regulatory reforms implemented since the last crisis, including the Basel III framework, helped the global financial system absorb shocks related to the COVID-19 pandemic, according to a new report released by the Basel, Switzerland-based Financial Stability Board today. “Greater resilience of banks at the core of the financial system and of financial market infrastructures as a result of the G20 reforms, have enabled the continued provision of financial services, including lending, thereby supporting economic recovery,” the report said.
FSB noted that the pandemic has been the first major test of the post-crisis regulatory framework and that it provides an opportunity to assess the overall effectiveness of the reforms. It has also highlighted, among other things, the need to better understand the nature of liquidity risks in the financial system and vulnerabilities in non-bank financial intermediation, FSB said.
