Bailey warns of stablecoin oversight and bank resolution gaps
Andrew Bailey, Chair of the Financial Stability Board (FSB), urged G20 finance ministers and central bank governors to strengthen cross-border oversight and reform implementation in his October 8, 2026 letter. He also flagged sovereign bond, private credit and AI risks.
AI toolkits meet border gaps
The FSB's Sound Practices for the Responsible Adoption of AI cover governance, lifecycle management, cyber risk and third-party services.
Adaptable to firms' size, type and AI adoption, the toolkit received industry input; Bailey urged G20 support and continued macroprudential coordination.
The stablecoin note finds cross-border regulatory interactions uncertain or undefined, including treatment of foreign-issued tokens.
Oversight, crisis management and cooperation in stress or insolvency remain immature.
Fraud risks persist, particularly in lightly regulated jurisdictions.
Priorities include better data and monitoring, implementing the 2023 recommendations, information-sharing and cross-border failure planning.
Reform delivery remains uneven
The modernisation consultation proposes efficient, risk-focused, forward-looking regulation that preserves resilience; finalisation is planned for 2027.
Randal K. Quarles, former Federal Reserve Vice Chair for Supervision and FSB Chair, leads the 2026 implementation review, seeking consistent outputs, wider consultation and clearer priorities.
Further work follows in 2027.
A backstop funding review finds gaps in last-resort temporary funding for banks in resolution, weakening preparedness.
It builds on lessons from the March 2023 bank failures; Bailey urged G20 action.
Preparedness remains the test
Bailey says post-crisis resilience must be preserved despite uneven implementation.
His August warnings covered sovereign bond deleveraging, private credit liquidity and valuation vulnerabilities, AI repricing and cyber risks.
The letter links safe innovation to vigilance and cross-border cooperation.