As the Financial Stability Board’s (FSB) chair gets ready to step down, he revealed that moving forward, the financial watchdog will focus more on reviewing existing rules instead of creating new ones.
“As its work to fix the fault lines that caused the financial crisis draws to a close, the FSB is increasingly pivoting away from design of new policy initiatives towards dynamic implementation and rigorous evaluation of the effects of the agreed G20 reforms,” Mark Carney said in a letter to G20 central bankers and finance ministers.
FSB coordinates financial regulation for the Group of 20 Economies. Carney’s remarks come as U.S. President Donald Trump has ordered American regulators to cut back on banking and derivatives reforms to encourage more lending to the economy.
According to Reuters, Carney will step down next year when his term as governor of the Bank of England ends.
He went on to outline some of the rules slated for review, including deciding if financial rules could be changed to promote investment in infrastructure; inspecting the effectiveness of the changes implemented to boost transparency into derivatives markets; and studying the impact of existing rules on financing small companies.
“To make sure it is fit for the next phase, the FSB’s membership is undertaking a thorough review of how the FSB works,” the letter stated. “The review will consider FSB transparency, consultation, mechanisms for setting its strategic agenda, and how to ensure discipline and efficiency in the FSB’s member-led groups charged with analysis and policy development, implementation and evaluation.”
And while some G20 members have requested for the FSB to regulate cryptocurrencies, Carney isn't convinced.
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time,” he said. “The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become significantly more widely used or interconnected with the core of the regulated financial system.”
The watchdog did say that it “will continue to regularly scan the horizon to identify and assess emerging risks, including through the bi-annual Early Warning Exercise conducted jointly with the IMF.”
G20 central bankers and finance ministers will meet in Buenos Aires on Monday and Tuesday of this week.