InfoBytes Blog
Filter
Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.
FSB G20 Roadmap proposes cross-border payment enhancements
On July 16, the Financial Stability Board (FSB) released its proposed recommendations to address issues and promote efficiencies in cross-border payments for public consultation. The recommendations were part of the G20 Roadmap, with the goal of improving cross-border payments by 2027. The FSB focused on two key areas:
- Aligning Data Frameworks: The FSB suggested creating greater alignment in data frameworks to reduce the cost and improve the speed and transparency of cross-border payments. The FSB identified the misalignment of data, restrictions on data sharing, and the cost of data storage as significant issues. To address these issues, the FSB recommended establishing a forum for collaboration across sectors, including payments, anti-money laundering and countering terrorism financing, and similar.
- Regulating and Supervising Payment Service Providers (PSPs): The FSB proposed policy recommendations to ensure consistent regulation and supervision of both bank and non-bank PSPs. The aim will be to create a level playing field, prevent regulatory arbitrage, and adapt to the rapidly changing landscape of cross-border payment services.
The FSB will be soliciting feedback on these proposals and has provided online forms for responses, which will be due September 9.
Financial Stability Board’s letter addresses financial topics for upcoming G20 meeting
On February 20, the Financial Stability Board (FSB) released a letter from its Chair, Klaas Knot, to the G20 Finance Ministers and Central Bank Governors ahead of the February 28-29 G20 meeting, setting up the agenda for maintaining global financial stability. The FSB is an organization made up of senior financial officials from G20 countries as well as international financial organizations including the International Monetary Fund, the World Bank, and the European Central Bank. The letter addressed financial system vulnerabilities, including the takeaways from the March 2023 banking crisis, nonbank financial intermediation (NBFI), digitalization of finance, climate change effects, and cross-border payment efficiency.
On the first topic, the letter highlighted lessons wrought by the March 2023 banking crisis; the FSB advocated the need for public-sector backstop funding mechanisms, and more analytical work on interest rate and liquidity risk to explore vulnerabilities. On NBFI, the letter noted a structural vulnerability in asset management as the “potential mismatch between the liquidity of fund investments and daily redemption of fund units in open-ended funds[.]” On digital innovation, the letter urges the G20 to closely monitor any risks to financial stability, including crypto, tokens, and artificial intelligence. On climate change, the FSB plans to further analyze climate-related financial risks to financial stability. Last, on cross-border payments, the G20 Cross-border Payments Roadmap goal is to make cross-border payments “faster, cheaper, and more transparent and inclusive” while keeping their integrity and maintaining the “safety of the system.” The letter noted that FSB has collaborated with AML experts in both the public and private sectors to “increase the efficiency of payments systems and further enhance their integrity and safety.”
US, Switzerland Announce Tax Evasion Program
On August 29, the DOJ announced a program to encourage Swiss banks to cooperate in its ongoing efforts to prosecute offshore tax evasion. The program—which, according to a joint statement with the Swiss Federal Department of Finance, Switzerland will encourage Swiss banks to consider participating in—requires, among other things, Swiss banks to make significant disclosures to the DOJ about cross-border activities and accounts that affect U.S. taxpayers in exchange for non-prosecution agreements or non-target letters.