At its meeting in Basel yesterday, the Financial Stability Board (FSB) discussed vulnerabilities affecting the global financial system and progress in authorities’ work to strengthen global financial regulation.
Vulnerabilities in the financial system
Despite important progress in strengthening the resilience of the global financial system, some parts of the system remain in a state of incomplete repair. Some jurisdictions need to continue to improve the capitalisation of their banking systems. The balance sheet assessment to be undertaken by the ECB later this year in preparation for the single supervisory mechanism, together with clarity on the availability of adequate capital backstops, will be important to strengthening the Eurozone banking system. In other parts of the world where credit growthas been very rapid over recent years, building further resilience remains a priority.
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