Financial Stability Board
|Predecessor||Financial Stability Forum|
The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established after the 2009 G-20 London summit in April 2009 as a successor to the Financial Stability Forum (FSF). The Board includes all G-20 major economies, FSF members, and the European Commission. It is based in Basel, Switzerland.
The Financial Stability Board emerged from the Financial Stability Forum (FSF), a group of finance ministries, central bankers, and international financial bodies. The FSF was founded in 1999 to promote international financial stability, after discussions among Finance Ministers and Central Bank Governors of the G7 countries, and a study which they commissioned. The FSF facilitated discussion and co-operation on supervision and surveillance of financial institutions, transactions, and events. FSF was managed by a small secretariat housed at the Bank for International Settlements in Basel, Switzerland. The FSF membership included about a dozen nations who participate through their central banks, financial ministries and departments, and securities regulators, including: the United States, Japan, Germany, the United Kingdom, France, Italy, Canada, Australia, the Netherlands and several other industrialized economies as well as several international economic organizations. At the G20 summit on November 15, 2008 it was agreed that the membership of the FSF will be expanded to include emerging economies, such as China. The 2009 G-20 London summit decided to establish a successor to the FSF, the Financial Stability Board. The FSB includes members of the G20 who were not members of FSF.
The Financial Stability Forum met in Rome on 28–29 March 2008 in connection with the Bank for International Settlements. Members discussed current challenges in financial markets, and various policy options to address them from this point forward. At this meeting, the FSF discussed a report to be delivered to G7 Finance Ministers and Central Bank Governors in April 2008. The report identifies key weaknesses underlying current financial turmoil, and recommends actions to improve market and institutional resilience. The FSF discussed work underway at the International Monetary Fund (IMF) and Organisation for Economic Co-operation and Development (OECD) with regard to sovereign wealth funds (SWFs). The IMF is working closely with SWFs to identify a set of voluntary best practice guidelines, and is focusing on the governance, institutional arrangements and transparency of SWFs. On April 12, 2008 the FSF delivered a report to the G7 Finance Ministers which details its recommendations for enhancing the resilience of financial markets and financial institutions. These recommendations cover five areas of financial oversight:
- Strengthened prudential oversight of capital, liquidity and risk management;
- Enhancing transparency and valuation;
- Changes in the role and uses of credit ratings;
- Strengthening the authorities' responsiveness to risks; and
- Robust arrangements for dealing with stress in the financial system.
The FSB represents the G-20 leaders' first major international institutional innovation. Secretary of the US Treasury Tim Geithner has described it as "in effect, a fourth pillar" of the architecture of global economic governance. The FSB has been assigned a number of important tasks, working alongside the IMF, World Bank, and WTO. Chairman of the board is the Canadian Mark Carney, Governor of the Bank of England.
The following countries and organizations are listed as members of the FSB:
- Bank for International Settlements
- European Central Bank
- European Commission
- International Monetary Fund
- Organisation for Economic Co-operation and Development
- The World Bank
Chairmen of the FSB
- Mario Draghi 2009-2011 - President of the European Central Bank and former Governor of the Bank of Italy
- Mark Carney 2011-present - Governor of the Bank of England and former Govenor of the Bank of Canada
- Genesis of the FSF, FSF website.
- fsforum.org, main website.
- FSF:Who we are.
- Financial Stability Forum meets in Rome, 29 March 2008, Press release, Website of Bank for International Settlements
- "Mark Carney gets chance to reshape Bank of England after departure of deputy governor". Financial Post. 13 June 2013. Retrieved 20 June 2013.
- "Links to FSB members". Financial Stability Board. Retrieved 17 November 2011.
- Financial Stability Board
- fsforum.org - main website
- April 2008 "Report of the Financial Stability Forum on Enhancing Market and Institutional Resilience"
- List of FSF press releases, at BIS website.
- Financial Stability Board Watch
- Brookings Institute report "The Governance of the Financial Stability Board"