An independent assessment of the Financial Stability Board (FSB) concludes that the organisation should be more selective when assigning new responsibilities and concentrate on risks that are genuinely cross‑border, cross‑sector and systemic.
The review was carried out by the Independent Monitoring Review (IMR) and led by Randal Quarles, the former chair of the FSB and former Vice‑Chair for Supervision at the Federal Reserve. The report was published on Wednesday and examined whether the FSB’s rule‑making practices themselves impede the international adoption and implementation of its recommendations.
Reasons for slow implementation
The IMR found that the primary drivers of delayed or stalled implementation—highlighted in a 2025 report—are national factors: differing legal frameworks, market structures and political capacities across jurisdictions. At the same time, the review notes that some FSB processes did not adequately take these national circumstances into account, which in certain cases unnecessarily complicated or politicised the adoption of FSB recommendations.
The report advises that, for emerging risks, the FSB should initially set high‑level principles and defer detailed, prescriptive requirements until the risks are better understood.
Recommendations and modernising supervisory frameworks
On Wednesday the FSB published eight recommendations aimed at modernising supervisory frameworks. Recent FSB work includes recommendations to improve cross‑border payments, to supervise global stablecoins, and the development of non‑binding guidance on the use of artificial intelligence.
Artificial intelligence: risk‑based human oversight
Both the review and the FSB’s updated stance stress that more intensive human oversight will be essential for higher‑risk AI use cases. The FSB says firms should establish clear, risk‑based thresholds that determine when an AI agent’s actions require human approval.
In line with this, the FSB removed a prior guideline that had suggested financial institutions treat AI systems as “synthetic employees.” Instead, the organisation now emphasises that AI agents do not think like humans and may interpret predefined objectives in unexpected ways, and that supervision and risk management should reflect these differences.
Why this matters
The review’s core message is that global policy recommendations should be designed with awareness of practical differences between member jurisdictions, and that rules for new technologies—particularly AI—should be refined incrementally as understanding improves. That approach is important for financial stability because lack of international coordination weakens the effectiveness of recommendations and the management of systemic risks.
Source and editing
This article summarises the IMR review and the FSB announcements as reported by Reuters. An AI assistant contributed to preparing the piece; the final content was edited and verified by our journalist.
