Feb 12, 2019 12:55 UTC
Feb 12, 2019 at 12:55 UTC
FSB Chair Thinks Digital Assets Could Threaten Any Financial Framework
The Financial Stability Board’s new chair, Randal K. Quarles holds the view that the rise of crypto-assets will prove to be a major barrier to the international financial body as it assesses worldwide financial vulnerability in order to revise its existing frameworks.
Quarles also serves as the vice chair for supervision at the Federal Reserve Board of Governors.
Quarles spoke at length at his inaugural speech On February 10, 2019, in Hong Kong, and said that the Financial Stability Board will initiate the process of reviewing its framework in order to ensure that the financial body is at the helm of financial stability vulnerability assessment.
He added that such a review process will enhance FSB’s ability to advocate improved financial stability policies for the G20 nations.
The FSB chair, however, said that the potential mass adoption of digital assets could prove as a hurdle for the development of a comprehensive framework. Quarles added,
“This will not be easy – developments like the emergence of crypto-assets may challenge any framework – but that makes the goal of a robust framework all the more important.”
Interestingly, Quarles did not elaborate on the scale of which this framework review process will be carried out.
The FSB had in July 2018 proposed a framework to monitor risks associated with digital assets with metrics to assess the growth of ICO’s, price volatility, as well as the use of digital currencies in global payments.
The review will be carried out by a committee headed by the vice chair of FSB, Klaas Knot.
Knot is currently also heading the central bank of the Netherlands as the President.
The Financial Stability Board was established in 2009 with the aim of providing financial vulnerability assessments for the G20 nations in order to prevent future global financial meltdowns.
Randal K. Quarles took over the role of the Chair of FSB on November 28, 2018, from the Governor of the Bank of England, Mark Carney.