How is the water? Klaas Knot reflects on the fragile calm of financial stability
Financial stability is like water to a fish—so constant, so quietly essential, that it’s easy to forget it’s there.
In his final address as Chair of the Financial Stability Board (FSB), delivered in Madrid, Klaas Knot (also the President of the Dutch central bank) used that image to frame a clear message: just because the system is holding doesn’t mean the job is done.
His remarks covered familiar ground: market turbulence, unfinished reforms, the fragility of non-bank financial intermediation (NBFI). The system has faced repeated shocks, and in many cases, held firm. But that’s no reason for complacency.
One of the most persistent weaknesses, he argued, is data. The NBFI sector remains opaque, unevenly regulated, and poorly understood. Data gaps, particularly around leverage and liquidity, continue to limit the ability of authorities to spot vulnerabilities before they spill over. A timely new high-level FSB group is now working to address those gaps.
Knot also turned to climate risk, calling for consistent, forward-looking, firm-level disclosures that can inform real-world supervision. The frameworks exist. What’s missing is implementation, and the resulting data. Structured, machine-readable reporting—yes, like XBRL—needs to become the norm, not the ambition.
His final message was measured but pointed: don’t wait for the next crisis to show us what we should have seen coming.
Read the full remarks here.
