Financial Stability Board issues recommendations for regulating cross-border payments

The Financial Stability Board has published two final reports on recommendations to promote greater alignment and interoperability across data frameworks related to cross-border payments, and consistency in the regulation and supervision of bank and non-bank payment service providers. In addition to the two reports, the FSB also published overviews of the consultation responses, setting out the main changes made to the final report in order to address comments raised in the public consultation.

The first report sets out final recommendations for promoting alignment and interoperability across data frameworks applicable to cross-border payments. The recommendations fall into four broad categories: (i) addressing uncertainty about how to balance regulatory and supervisory obligations; (ii) promoting the alignment and interoperability of regulatory and data requirements related to cross-border payments; (iii) mitigating restrictions on the flow of data related to payments across borders; and (iv) reducing barriers to innovation.

The second report sets out recommendations for regulating and supervising bank and non-bank PSPs offering cross-border payment services to strengthen consistency in a way that is proportionate to the risks associated with such activities. The FSB explains that this approach aims to reduce the prospect of regulatory arbitrage by establishing a level playing field that takes into account differences in business models and risk profiles.

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