FSB Middle East and North Africa Group Discusses Regional Financial Stability Issues and Cross-Border Payments

The Financial Stability Board (FSB) Regional Consultative Group for the Middle East and North Africa (RCG MENA) met today in virtual format.

The group discussed global and regional macroeconomic and financial stability developments. Spillovers from bank failures in the US and Europe in March have been muted. However, geopolitical factors are weighing on the outlook and macro-financial risks stemming from a higher-for-longer interest rate environment are rising. The group discussed the implications of a higher interest-rate environment and vulnerabilities in non-bank financial intermediation (NBFI).

The group had an in-depth discussion on arrangements for cross-border payments. The FSB is coordinating the G20 Roadmap for enhancing such payments. In October, the FSB published its first annual progress report on meeting the quantitative targets by 2027, which included an initial dataset of key performance indicators for monitoring progress. Many members viewed the data in the report to be consistent with their own observations, and they discussed regional initiatives to strengthen payments arrangements.

Members received an update on the FSB’s work programme for 2024. The FSB will continue to work on the lessons from the March turmoil and to monitor macro-financial vulnerabilities in a higher interest rate environment. Members discussed ways they could contribute to the FSB’s work programme to bring in additional perspectives from the region, with a particular focus on advancing work on the global regulatory and supervisory framework for crypto-asset markets and activities; enhancing cross-border payments; post-March turmoil work; and strengthening cyber and operational resilience.

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