FSB Middle East and North Africa group meet to discuss financial stability outlook and cross-border payments

Basel - The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Middle East and North Africa (MENA) met on 12 December in virtual format to discuss the current challenging backdrop for global financial stability.

The FSB said members shared their differing experiences of the impact of rising commodity prices on their economies and vulnerabilities related to tighter financial conditions and debt, particularly in foreign currencies, with members exchanging views on measures that could be taken to contain harmful cross-border spill-overs and enhance the resilience of emerging markets and developing economies against shocks. Members also discussed actions their authorities are taking to enhance financial crisis preparedness and management frameworks.

Members were updated on the work to implement the FSB Roadmap to enhance cross-border payments by improving cost, speed, access and transparency, it said, adding that work under the Roadmap going forward will be focused on three priority areas: payment system interoperability and extension; legal, regulatory and supervisory frameworks; and cross-border data exchange and message standards.

The FSB said members also exchanged views on the potential benefits from the use of the Legal Entity Identifier (LEI) in cross-border payment transactions, further explaining that engagement with both the public and private sector beyond the G20 will be a key part of the next stage of the Roadmap. Supporting engagement in the region, which also includes the role RCG members could play in promoting broader adoption of the LEI, was also part of the discussions.

Members also received an update on the FSB’s work programme for 2023, including deliverables to India’s G20 Presidency. The main priorities for the FSB’s work include:

1. intensifying its monitoring and analysis of financial stability issues;
2. enhancing the resilience of the NBFI sector;
3. advancing work on the global regulatory and supervisory framework for crypto-asset markets and activities;
4. enhancing cross-border payments;
5. strengthening cyber and operational resilience;
6. enhancing CCP resilience, recovery and resolvability; and
7. addressing financial risks from climate change. Members discussed areas that would be of interest to RCG MENA members and how they could contribute their expertise to that work.