FSB, IMF Close One Data-Gap Project, Open Next Phase

In a joint report today, the FSB and the IMF reported progress on closing financial data gaps, closing the second phase of the Data Gaps Initiative called for by the G20 in 2009.  The project identified these gaps in the wake of the financial crisis, with phase two specifically addressing increasing data collection on financial stability risks and interconnections, as well as enhancing communication of financial statistics.  The organizations state that data gaps have closed considerably on financial soundness indicators, G-SIFIs, non-bank intermediation, and other financial stability risks.

IMF Staff Assess Green CBDC Options

A new IMF paper concludes that Proof of Work-based DLT applications should not define any payment system transformation prioritizing reduced energy consumption, including CBDC.  Although CBDC could be designed to be more energy efficient than the current payment system, the ultimate energy efficiencies and environmental benefits of CBDC will depend on the design priorities of the issuing central bank.

BIS Officials Caution re “Green Bubbles”

In an article today, top BIS officials highlighted the potential risk of “green bubbles” and stressed the limits of the financial industry’s ability to reduce climate risk.  The article states that the financial sector faces the same misalignment of incentives as other industries, with the current generation bearing the costs of a green transition that will mainly benefit future generations.