Incomplete reform implementation leaves financial system vulnerable to shocks, warns FSB Chair

Press enquiries:
+41 61 280 8477
[email protected]
Ref: 17/2025

• In his letter to G20 Finance Ministers and Central Bank Governors, FSB Chair Andrew Bailey stresses the importance of multilateral cooperation and reform implementation in the current environment of elevated risks and uncertainty.
• Mr Bailey notes that the rapid evolution of the financial sector calls for enhanced surveillance of emerging risks.
• An interim report from the FSB's strategic review of implementation monitoring shows that full, timely and consistent implementation of G20 reforms has not been completely achieved, leaving the financial system vulnerable to shocks.

The Financial Stability Board (FSB) today published a letter from its Chair, Andrew Bailey, to G20 Finance Ministers and Central Bank Governors ahead of their meeting on 15-16 October. The letter is accompanied by an interim report from the G20 strategic review of the FSB implementation monitoring work, led by former FSB Chair Randal K. Quarles.

In the current environment of elevated risks and uncertainty, Mr Bailey's letter highlights the importance of global standards and cooperation, not just to prevent crises, but also as a foundation to support sustainable growth.

However, the preliminary results from the G20 strategic review of the FSB implementation monitoring work show that full, timely and consistent implementation of G20/FSB reforms has not been completely achieved, despite the active programme of implementation monitoring by the FSB and standard-setting bodies. Significant inconsistencies in the implementation of global financial reforms can pose risks to market efficiency, financial stability and the integrity of the global regulatory framework.

Mr Bailey reaffirms the FSB remains steadfast in its mandate to promote timely and consistent implementation. The next phase of the G20 strategic implementation monitoring review will reflect on why implementation gaps exist and make specific recommendations to strengthen the FSB's monitoring and implementation processes.

The rapid evolution of the financial sector, coupled with the uncertain economic and political outlook, calls for enhanced surveillance. The adoption of artificial intelligence in the financial sector or the increasing use of stablecoins for payment and settlement purposes, for example, put a premium on the monitoring of emerging risks. To address this, the FSB will enhance its surveillance capabilities by improving its agility to recognise and respond to emerging vulnerabilities and strengthening engagement with stakeholders, including the private sector. The FSB will also improve the communication of its assessments, to enable public and private sector stakeholders to better mitigate risks.

October G20 deliverables

The FSB is delivering four reports to the G20:

• G20 Roadmap for Cross-border Payments: Consolidated progress report for 2025
• Monitoring Adoption of Artificial Intelligence and Related Vulnerabilities in the Financial Sector
• G20 Implementation Monitoring Review Interim Report, delivered today with the Chair's letter
• A thematic review, monitoring progress implementing the FSB Global Regulatory Framework for Crypto-asset Activities (to published on 16 October).

Notes to editors

In 2025, at the request of the South African G20 Presidency, the FSB embarked on a strategic review of its work to encourage and monitor the implementation by member jurisdictions of the agreed G20/FSB financial reforms, with a view to identify any opportunities for improvement. The high level team conducting the review is led by an independent external Chair, Randal K. Quarles (former FSB Chair and former Vice Chair for Supervision of the US Federal Reserve Board). It comprises the following FSB Plenary members: Ayman Al-Sayari, Governor of the Saudi Central Bank; Mark Branson, President of Bundesanstalt für Finanzdienstleistungsaufsicht; Pablo Hernández de Cos, General Manager of the Bank for International Settlements; and Ryozo Himino, Deputy Governor of the Bank of Japan, in his capacity as Chair of the Standing Committee for Standards Implementation.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It 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. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The FSB is chaired by Andrew Bailey, Governor of the Bank of England. The FSB Secretariat is located in Basel, Switzerland and hosted by the Bank for International Settlements.