The massive effort to reform financial sector regulation has addressed many of the vulnerabilities revealed by the financial crisis, but there is more work to be done as the landscape continues to evolve, says a report from the Financial Stability Board (FSB).

In advance of the upcoming two-day G20 summit in Hamburg, which starts on July 7, the FSB published a report assessing the progress at overhauling financial sector regulation.

The FSB indicates that, as a result of the reforms, banks are generally stronger and more liquid, the over-the-counter (OTC) derivatives markets have become more transparent and robust, and many of the riskier aspects of shadow banking have been eliminated,.

However, the FSB also notes that there’s still work to be done. The remaining reforms of the capital adequacy regime for global banks has to be finalized and implemented, it says. Also, there’s work to be done at improving trade reporting in the OTC derivatives market. In addition, cross-border resolution frameworks must be developed, and some of the underlying causes of misconduct, particularly compensation and incentive systems, need reforming.

The report says “the FSB will continue to scan the horizon to identify, assess and address new and emerging risks to financial stability.”

For example, the group is monitoring possible financial stability issues that could be raised by financial technology, and seeking to address a decline in correspondent banking relationships.

The report also calls on global regulators and policymakers to work to maintain an open, integrated financial system, to monitor systemic liquidity, and to be aware of the effects of reforms on emerging market economies. It also calls on global authorities to continue co-operating and sharing information.

Separately, the Basel Committee on Banking Supervision also published a report for the G20 summit. The Basel Committer report confirms the implementation of tougher capital and liquidity standards among global banks, but notes there continue to be challenges in other areas, such as the standardized approach for measuring counterparty credit risk and capital requirements for exposures to central counterparties.

The FSB also published a framework for evaluating the effects of the post-crisis reforms that is intended to help policymakers assess whether the reforms are having the desired effects, and whether any serious unintended consequences have emerged that need to be addressed.

Additionally, the FSB has published a series of reports that focus on various aspects of the reforms efforts, including derivatives market reform, shadow banking, and the implementation of compensation standards in various segments of the industry.