The Financial Stability Board published a letter from Chair Andrew Bailey to G20 finance ministers and central bank governors ahead of their Oct. 15 meeting, warning of heightened sovereign bond market volatility, private credit vulnerabilities and risks from artificial intelligence. An accompanying note calls for stronger monitoring and international oversight of global stablecoin arrangements, building on the FSB’s 2023 recommendations. Stablecoins had a market value of about USD 300 billion in mid-2026, with 99% by value pegged to the U.S. dollar. The stablecoin assessment finds that cross-border regulatory interactions remain uncertain in many jurisdictions, including for foreign-issued stablecoins, while arrangements for oversight, crisis management and cooperation during stress or insolvency remain immature. The FSB proposes closer monitoring of holdings, redemptions, reserve assets and secondary-market liquidity, stronger information sharing, and further work on planning for the distress or failure of global stablecoin arrangements. The G20 package also includes final sound practices covering financial institutions’ AI governance, lifecycle management, cyber risk and third-party services. It presents proposed principles for more risk-focused and forward-looking regulation and supervision, reviews how the FSB’s policy design can support implementation, and highlights gaps in last-resort public funding mechanisms for banks in resolution that weaken authorities’ preparedness to manage systemic failures.
Financial Stability Board flags sovereign bond, private credit and AI risks and seeks stronger cross-border stablecoin oversight
The Financial Stability Board warned the G20 of risks from sovereign bond volatility, private credit and AI, while calling for stronger cross-border monitoring and oversight of global stablecoins. Its package also covers responsible AI adoption, regulatory and supervisory modernisation, policy implementation and gaps in public backstop funding for banks in resolution.