Financial Stability Board Consults on Recommendations to Enhance Cross-Border Payments

The Financial Stability Board has launched two consultations: the first on proposed recommendations to promote greater alignment in data frameworks related to cross-border payments, and the second on consistency in the regulation and supervision of bank and non-bank payment service providers. First, in relation to data frameworks, the FSB's recommendations aim to address identified frictions that pose significant challenges to improving the cost, speed, transparency, and accessibility of cross-border payments, while maintaining their safety and security and upholding the objective of protecting the privacy of individuals. These frictions include the misalignment of data in payments that interferes with the smooth processing of cross-border payments, restrictions on data sharing that impede the ability to safely process cross-border payments, and increased costs due to data storage and handling requirements. To take forward these recommendations in a coordinated manner and to identify emerging issues that should be addressed, the FSB proposes the establishment of a forum comprised of public-sector stakeholders covering payments, AML/CFT, sanctions, and data privacy and protection.

Secondly, on strengthening regulatory and supervisory consistency, the FSB's recommendations aim to ensure quality and consistency in the legal, regulatory, and supervisory regimes for PSPs and to promote greater alignment between those applicable to banks and non-banks in their cross-border payment activities. This approach reduces the likelihood of regulatory arbitrage by establishing a level playing field for both banks and non-bank PSPs, despite differences in business models and risk profiles.

The deadline for comments on both sets of recommendations is September 9, 2024.

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