March 20, 2020 / 1:10 PM / 2 months ago

UPDATE 1-G20 watchdog urges flexibility for banks to help virus-hit economy

(Adds more detail)

By Huw Jones

LONDON, March 20 (Reuters) - Regulators should use the flexibility built into financial rules to help banks keep funds flowing to the economy during the coronavirus epidemic, the Financial Stability Board said on Friday.

The FSB coordinates financial rules for the Group of 20 Economies (G20) and said the global financial system was in better shape to cope with market stress caused by coronavirus than it was in the financial crisis a decade ago.

The board, made up of regulators, central banks and treasury officials from G20 nations, have pushed through a welter of tougher rules since that crisis, in particular much higher bank capital requirements.

"The FSB encourages authorities and financial institutions to make use of the flexibility within existing international standards to provide continued access to funding for market participants and for businesses and households facing temporary difficulties from COVID-19," the FSB said in a statement.

The FSB said it was actively cooperating to maintain financial stability during market stress.

"Many members of the FSB have already taken action to release available capital and liquidity buffers, in addition to actions to support market functioning and accommodate business continuity plans," it added. (Reporting by Huw Jones; Editing by Hugh Lawson)

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