FSB Report on the Interaction between U.S. Dollar Financing and External Vulnerabilities in EMEs.

The Financial Stability Board published a report on the interaction between U.S. dollar funding and external vulnerabilities in emerging market economies (EMEs). The report was prepared in collaboration with the IMF and is part of the FSB's work program on nonbank financial intermediation.

It describes policy requirements to reduce the vulnerability of emerging market economies to foreign currency lending. These include measures to address the buildup of currency mismatches, enhancing crisis management tools, and addressing data gaps to facilitate risk monitoring and timely adoption of measures. Furthermore, relevant policy actions taken in March 2020 are also discussed.