LONDON (Reuters) -Bank of England Governor Andrew Bailey stressed the importance of international cooperation to achieve finance stability, saying in a letter to G20 policymakers on Monday that uncertainty continued to weigh on global growth expectations.
Bailey, who chairs the financial stability watchdog of the Group of Twenty (G20) major economies, said global cooperation and engagement were required for financial stability, and urged vigilance against the risk of disruptive market moves.
Earlier in the day, the FSB delivered a new plan to tackle climate risks, but paused further policy work amid a retreat by the United States that has tested efforts to advance a unified approach.
“Jurisdictions cannot achieve financial stability alone,” Bailey said in the letter, addressed to G20 finance ministers and central bank governors.
READY TO ACT
The G20, whose members represent around 85% of global GDP and two-thirds of the world’s population, established the Financial Stability Board in the aftermath of the 2008 financial crisis to held safeguard the financial system.
“The FSB’s broad and varied membership makes it uniquely placed to deliver on its mandate. This is important in both good times and bad,” he said.
“It is vital that policy makers can act collectively in response to a global shock. We should not take this capability for granted, particularly against the backdrop of geopolitical tensions and rising fragmentation risk,” he added.
Since April, when U.S. President Donald Trump’s “Liberation Day” tariffs roiled financial markets, conditions have improved and asset prices have recovered, despite heightened uncertainty, he said.
“We need to remain vigilant, however, to the risk of disruptive market moves and we will look at the lessons to be learnt from the market events in April,” Bailey said
He said the FSB was closely monitoring market developments and “stands ready to act, as necessary.”
(Reporting by Muvija M; Editing by Leslie Adler and Deepa Babington)
