The Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, has proposed a framework for categorizing major areas of financial technology innovation, including distributed ledger technology.
The FSB met in Tokyo to take forward its priorities for this year, including the work it will deliver to the G20 Leaders at their Summit in Hangzhou in September. A key deliverable agreed at the meeting was elements of a public consultation to take place in mid-2016 on policy recommendations to address structural vulnerabilities from asset management activities.
Several key issues were discussed at the meeting such as asset management and market liquidity risks; transforming shadow banking into resilient market-based finance; addressing emerging vulnerabilities; Climate-related financial risks; and much more.
While discussing ‘Financial system implications of technological innovations’, the FSB said:
“The Plenary reviewed major areas of financial technology innovation, including distributed ledger technology, and proposed a framework for categorising them and assessing any financial stability implications. Plenary members discussed the issues raised for public authorities by these technologies, possible steps to address potential risks, and opportunities for cooperation in the FSB and with the standard-setting bodies to deepen analysis and develop regulatory perspectives”.
The FSB brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. It is chaired by Mark Carney, Governor of the Bank of England.
