Tag: Financial Stability Board

Financial Stability Board

FSB Names New Chair

The Financial Stability Board (FSB) has named Randal Quarles, governor and vice chairman for supervision at the US Federal Reserve, as its new chair. In addition the FSB appointed Klaas Knot, president of De Nederlandsche Bank as vice chair. Both men have been appointed for a three-year term starting on 2 December 2018.
The FSB’s Plenary, which made the appointment, also agreed that after three years on 2 December 2021 Knot will take over as chair for the next three-year term.
Plenary members unanimously welcomed these appointments, FSB says, which were made at the recommendation of a specially constituted Nominations Committee.

FSB: Cryptoassets Not a Risk to Financial Stability

In a new report to the G20, the Financial Stability Board (FSB) has concluded that “cryptoassets do not pose a material risk to global financial stability at this time”.

While this is a welcome boost for the crypto industry, the FSB does make clear that these assets should be vigilantly monitored by authorities going forward.

As such, the FSB has requested that the Standing Committee on Assessment of Vulnerabilities (SCAV) and the Committee on Payments and Market Infrastructures (CPMI) work jointly to develop a framework for monitoring the financial stability risks related to cryptoassets with a focus on identifying potential metrics that can be used to measure these risks.

ISDA Launches Global Consultation on Benchmark Fallbacks

The International Swaps and Derivatives Association has launched a market-wide consultation on technical issues related to new benchmark fallbacks for derivatives contracts that reference certain interbank offered rates.
The consultation sets out options for adjustments that would apply to the fallback rate in the event an IBOR is permanently discontinued.
ISDA has been leading an industry effort to implement robust fallbacks for derivatives contracts referenced to certain Ibors since 2016, at the request of the Financial Stability Board’s Official Sector Steering Group.

FSB Reinforces Support for Overnight RFRs

The Financial Stability Board has published a statement on reforms to interbank offered rates and the development of overnight risk-free, or nearly risk-free, rates and term rates.
The FSB says the statement is intended to provide market participants and other stakeholders with its views ahead of a forthcoming consultation by the International Swaps and Derivatives Association which contemplates fall backs for certain derivative contracts based on overnight RFRs. The FSB started its work on reforms to IBORs following enforcement action taken by FSB member authorities in response to the manipulation of these benchmarks.

FSB Investigates AI and Machine Learning

The Financial Stability Board (FSB) has published a report that considers the financial stability implications of the growing use of artificial intelligence (AI) and machine learning in financial services.
It notes that financial institutions are increasingly using AI and machine learning in a range of applications across the financial system including to assess credit quality, to price and market insurance contracts and to automate client interactions. The lack of interpretability or auditability of AI and machine learning methods could become a macro-level risk, FSB warns.

FSB Publishes Update on Misconduct Risk

The Financial Stability Board (FSB) has published a progress report for G20 leaders on its work plan to reduce misconduct in the financial sector.
The work plan was established in May 2015 following what the FSB terms “significant and widespread incidents of misconduct in recent years, and given the potential of misconduct to harm institutions and customers and impair trust in the financial system”.
The latest report details the recent actions taken and recommended by the FSB and the standard-setting bodies.

Shift to Reformed Euribor Expected in H1 2017, FSB Says

Implementation of a reformed Euro Interbank Offered Rate (Euribor) is expected to happen in the first half of 2017, according to the Financial Stability Board (FSB). The FSB – which groups G20 financial authorities – has published an update on the process of reforming major interest rate benchmarks at international level on the back of […]