Independent Review Urges Financial Stability Board to Prioritize Systemic Risks

The Independent Monitoring Review (IMR) group, chaired by Randal Quarles, released a report on Wednesday stating that the Financial Stability Board (FSB) must be more selective in prioritizing its workload. The review concludes that the global financial watchdog should concentrate on vulnerabilities that are genuinely systemic, cross-border, and cross-sectoral.

The IMR found that the FSB's policy development processes have occasionally hindered implementation by failing to account for political capacity, market structures, and national legal frameworks. To address this, the group recommended that the FSB adopt high-level principles for emerging vulnerabilities and only introduce detailed requirements once risks become clearer.

In a parallel effort to update its operations, the FSB proposed eight recommendations to modernize supervision frameworks. The organization has recently focused on supervising global stablecoins, improving cross-border payments, and creating non-binding guidance for the use of artificial intelligence.