Key facts
- The Financial Stability Board should prioritize work on genuinely systemic risks, according to a review.
- The review was conducted by the Independent Monitoring Review (IMR) group, chaired by Randal Quarles.
- National factors are the primary reasons for delayed implementation of FSB recommendations.
- The FSB's processes have sometimes made implementation more difficult than necessary.
- The FSB proposed eight recommendations to modernize supervision frameworks.
A review of the Financial Stability Board's processes has concluded that the global financial risk watchdog should be more selective in its priorities, concentrating on vulnerabilities that are genuinely cross-border, cross-sectoral, and systemic. The findings, published on Wednesday by the Independent Monitoring Review (IMR) group, were commissioned to assess whether the FSB's methods for developing, drafting, and presenting policy created obstacles to implementation.
The IMR, chaired by Randal Quarles, a former FSB chair and former US Federal Reserve vice chair for supervision, noted that national factors such as legal frameworks, market structures, and political capacity are the main reasons for the delayed or stalled implementation of FSB recommendations. The review stated that the FSB's own processes had not always sufficiently accounted for these national circumstances, occasionally making implementation more difficult or contentious than necessary.