G20 watchdog proposes rules for non-bank intermediaries

The Basel-based Financial Stability Board (FSB), which acts as the G20’s financial risk watchdog, unveiled on Wednesday recommendations to address risks posed by hedge funds, insurers, and other non-bank financial intermediaries, which now represent nearly half of global financial assets.

The sector has grown by 130 per cent since 2009, increasing complexity and interconnectedness in financial systems, according to the G20 watchdog.

The proposals include domestic frameworks to monitor non-bank leverage, tailored policy measures to mitigate risks, and enhanced counterparty credit risk management aligned with revised Basel Committee guidelines.

The FSB also advocates improved private disclosure, regulatory consistency through “same risk, same regulatory treatment,” and stronger cross-border cooperation.

The consultation report invites feedback from member governments, with a final report expected in mid-2025.

Attribution: Reuters

Subediting: M. S. Salama