The Financial Stability Board (FSB) has published FSB chair Randal K. Quarles’ letter to G20 Leaders ahead of their summit in Osaka on 28-29 June, together with a progress report on implementation of the G20 financial regulatory reforms.

Among the key themes Quarles addressed, he wrote that a deep and early understanding of how technological innovation may transform financial institutions and markets is key for harnessing benefits while containing risks.

In the wake of Facebook’s recent unveiling of Libra, Quarles said: “A wider use of new types of crypto-assets for retail payment purposes would warrant close scrutiny by authorities to ensure that that they are subject to high standards of regulation. The FSB and standard-setting bodies will monitor risks very closely and in a coordinated fashion, and consider additional multilateral responses as needed.”

In other issues he added that the FSB will remain vigilant in identifying emerging risks. “Potential vulnerabilities persist and, in some cases, have built up further. Corporate and public debt levels have continued to rise. The FSB is closely monitoring leveraged loan and collateralised loan obligation markets in order to obtain a fuller picture of the pattern of exposures to these assets globally.”