LONDON - Patchy progress on implementing reforms to make money market funds and other types of "non banks" safer has left the global financial system vulnerable to more shocks, the G20's risk watchdog said on Monday.

The Financial Stability Board said that many of the underlying vulnerabilities that contributed to incidents, such as central banks having to inject liquidity to stabilise money market funds at the outset of COVID-19 lockdowns, are still largely in place.

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Progress by G20 countries on implementing money market and open ended funds, margining and liquidity reforms set out by the FSB has been uneven, and "we may already be losing momentum", FSB Chair Klaas Knot said in a letter to G20 central bankers and finance ministers meeting in Brazil this week.

Non-banks, which include insurers, private equity, hedge funds and other investment funds, now account for almost half of global financial assets.

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"To enhance the resilience of the global financial system, it is critical that we finalise NBFI (non bank financial intermediation) reforms and strongly commit ourselves to full and timely implementation," Knot said.