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The Financial Stability Board (FSB) has conducted a virtual meeting to assess financial stability issues and potential vulnerabilities confronting the Asia-Pacific region.
The discussion focused on potential risks associated with service outsourcing and third-party relationships, including concentration of risk associated with dependence on a small number of outsourcing and third-party service firms.
The FSB launched a public consultation in November 2020 to gather industry feedback relating to risks associated with outsourcing and third-party relationships. This attracted responses from 39 organisations, including banks, insurers, financial market infrastructure companies, third-party service providers and industry associations.
The FSB released a summary of this industry feedback — responding to a FSB consultation paper entitled Regulatory and Supervisory Issues Relating to Outsourcing and Third-Party Relationships — on 14 June 2021.
In today’s Regional Consultative Group meeting, FSB members also addressed financial stability implications presented by rapid innovation in financial services, linked to technology and other areas, and how financial supervisors can maximise opportunity generated by innovation and technology development while containing potential risks.
More broadly, the meeting reflected on macroeconomic risks at global and regional level, along with risks to financial stability presented by COVID-19 and policies designed to promote recovery from the pandemic.
The FSB has six regional consultative groups, each meeting twice per year, which bring together member and non-member countries to reflect on vulnerabilities affecting the financial system and steps to promote financial stability.
In line with this agenda, mapped out under the FSB Charter, today’s meeting delivered an update on the FSB work programme and its expected output during the term of Indonesia’s presidency during 2022.
The FSB Regional Consultative Group for Asia is chaired by Benjamin E Diokno, governor of Banko Sentral ng Pilipinas, and M Rajeshwar Rao, deputy governor of the Reserve Bank of India, respectively the central banks of the Philippines and India.
