On Tuesday, the chairman of the Financial Stability Board (FSB) said that global financial regulators are developing a coordinated oversight system to detect new threats from cheaper lending standards and high asset values.
The FSB groups bankers, regulators and finance ministry officials from the Group of 20 economies and has largely completed work on strengthening financial rules since the global banking crisis a decade ago.
Riddle Quarles, the recently appointed head of state in his first letter to the G20’s economic policy makers, said the weaknesses were building on the financial system and the negative risks to global growth, including the possibility of a breach without agreement, were growing.
“The FSB will continue to scan the horizon to identify and assess emerging risks … and will develop a clear framework of oversight,” said Quarles, who became FSB chairman in December and is also Deputy Chairman of the Reserve Federal Banking Supervision.
Mark Carney, the predecessor of Quarles, the Governor of the Bank of England, compared the $ 2 trillion loan market with companies with high debt to subprime mortgages that had failed 10 years ago and triggered the global financial crisis.
Quarles said: “The FSB is monitoring the developments and, if necessary, advising the G20 ministers and governors of the risks if they will crystallize.”
The FSB will also identify potential gaps in crypto property management, analyze the implications of high-tech companies expanding into financial services, and develop effective ways for financial firms to recover from cyberattacks./Investing.com