FSB warns regulators: finance is getting faster, risks are getting bigger
Regulators are used to financial shocks unfolding over weeks or months. That timeline is gone.
Speaking in Tokyo, Martin Moloney, Deputy Secretary General of the Financial Stability Board (FSB), warned that AI-driven trading, crypto markets, and tokenised assets are accelerating financial risks at an unprecedented pace. Bank runs, market crashes, and liquidity crunches can now happen in hours, leaving regulators struggling to react in time.
The solution is not just tougher rules but a fundamental shift in how regulators operate. Moloney stressed that new market players must be brought under oversight before they grow too big to fail, rather than after. But bringing them in is not enough—regulators need the right expertise to understand the technologies driving financial innovation. AI, blockchain, and digital assets are no longer niche developments, and failing to grasp their risks could leave regulators powerless to intervene when it matters most.
Adding to the challenge, outdated regulatory processes are slowing oversight down. Too much supervision still relies on slow, manual data collection, while financial markets now operate in real time. If regulators are to keep up, they need better tools and faster access to reliable, structured data.
In a system moving this fast, information is everything. Regulators need structured, standardised, high-quality data, not just to respond to crises but to see them coming. Without it, they are flying blind. The FSB’s latest work on AI, crypto, and tokenisation is a step in the right direction, but the real challenge is whether regulators can move at the speed of the risks they are trying to contain.
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