As the Financial Stability Board looks to refresh its work plan after COVID-19, FSB Chairman Randal Quarles today said it would continue to focus on non-bank financial intermediation, along with other emerging issues that pose threats to financial stability, including climate-related financial risk, crypto assets and stablecoins.
With regard to crypto, “we need to be mindful of whether our regulatory and supervisory approaches appropriately address risks while preserving the benefits that innovation can bring,” Quarles noted. “As these continue to develop, we continue to explore difficult questions. Are these digital assets currencies? Or securities? Deposits? They don’t fit neatly into our regulatory buckets, and they operate in the digital ether where they can easily cross national borders.”
FSB last month released a new surveillance framework for monitoring and assessing vulnerabilities, which “will better account for resilience, our capacity to absorb shocks, in order to better appraise net vulnerabilities and identify gaps,” Quarles added. “It will also systematically scan the financial landscape to better capture new and emerging vulnerabilities and emphasize those that may prompt cross-border spillovers.”