Financial Stability Board launches surveillance framework
The Financial Stability Board (FSB) has published a new Financial Stability Surveillance Framework, with a focus on understanding and classifying vulnerabilities. It aims to help in their comprehensive, methodical review, and therefore in identifying and addressing new and emerging risks to financial stability.
The framework offers a common terminology on key concepts such as vulnerabilities, shocks and resilience. It also distinguishes between global vulnerabilities that are currently material, those that may become material in the next 2 to 3 years, and those that may become material over a longer horizon. This ought to allow for more effective monitoring and analysis, with potential implications for reporting needs, feeding into policy dialogue.
“The assessment of vulnerabilities in a rapidly evolving environment is a primary mission of the FSB and a cornerstone in maintaining financial stability. The new framework will further enhance the FSB’s ability to identify and address such vulnerabilities in a proactive manner”, says Klaas Knot, President of De Nederlandsche Bank, Vice-Chair of the FSB and Chair of its Standing Committee on the Assessment of Vulnerabilities that oversaw the preparation of the report.
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