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Managing the transition to a post-pandemic world tops the agenda for global regulators in 2022, the Financial Stability Board (FSB) said in a letter to G20 policy-makers.

Ahead of a two-day meeting that started Thursday, the FSB warned the G20 finance ministers and central bank governors that the financial markets’ adjustment to a post-pandemic landscape could represent a threat to financial stability in the year ahead.

“In the current environment, embedded leverage in some parts of the financial system as well as rising real estate and other asset valuations across a number of jurisdictions have become vulnerabilities,” it said.

“A rapid or disorderly tightening of financial conditions and a greater divergence of these conditions between advanced and emerging market economies” could pose risks to stability, the FSB said.

At the same time, the group will be focused on reinforcing the resilience of the financial system in the wake of the pandemic.

In particular, the resilience of the shadow banking sector remains a “top priority” it said.

The transformative effects of the pandemic on the financial industry itself, through increased reliance on digitalization, is also a key concern for the FSB.

“The financial system also needs to harness the benefits of digital innovation while managing the risks, not least in the form of rapidly developing crypto-assets, and play its part in the transition to reduced, and eventually, net zero carbon emissions,” the FSB said in its letter.

All of these issues will form part of the group’s work for the coming year, it said.

In October, the FSB plans to publish a report detailing its high-level recommendations for regulating “global stablecoins”.

Reports on innovation in cross-border payments and cyber incident reporting will be on tap at the same time, it said.

In the meantime, in July, the FSB will publish a progress report on its efforts at addressing climate-related financial risks, with a report on standardizing financial disclosures due in October.

“The ultimate goal of the FSB’s roadmap for addressing climate-related financial risks is to ensure that climate risks are properly reflected in all financial decisions,” it said.