FSB Examines How Policy Design Affects Implementation

Last week, the Financial Stability Board (FSB) published the second report from its G20 Implementation Monitoring Review, finding that uneven implementation of global financial reforms is driven mainly by national circumstances but can also reflect how the FSB itself develops, drafts, and presents policy recommendations.

Led by former FSB Chair Randal K. Quarles, the review follows a 2025 report that identified a “worrisome slowdown” in implementation of post-crisis reforms. The new report finds that legal frameworks, market structures, and political capacity remain the main reasons implementation differs across jurisdictions. But it also concludes that FSB policy processes have sometimes failed to account sufficiently for those constraints, making implementation “more difficult, or more contested, than it needed to be.”

The report argues that the environment for global standard setting has also changed since the financial crisis. Political urgency and consensus have weakened, while the FSB increasingly deals with emerging risks that are still developing and difficult to quantify. It therefore recommends more disciplined prioritization, with policy work focused on issues that are cross-sectoral, cross-border, or systemically significant. For emerging vulnerabilities, the FSB could rely more on monitoring and supervisory discussion rather than automatically developing new policy recommendations.

The review also recommends starting more often with high-level principles rather than detailed prescriptions, particularly where risks are not yet well understood. It calls for earlier engagement with industry, the public, and emerging market authorities; stronger coordination with international standard-setting bodies; and greater use of supervisory experience when deciding whether new policy is needed.

Finally, the FSB plans to standardize the format and language of its policy documents, clarify implementation expectations, consolidate recommendations in one place, and adopt a written framework for developing future policies. The final stage of the review, expected in the first half of 2027, will examine how the FSB itself monitors implementation.