Financial Stability Board

Financial Stability Board

Predecessor	Financial Stability Forum
Formation	April 2009
Headquarters	Basel, Switzerland
Chairman	Mark Carney^[1]
Affiliations	G20
Website	FSB.org

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 G20 London summit in April 2009 as a successor to the Financial Stability Forum (FSF). The Board includes all G20 major economies, FSF members, and the European Commission. It is based in Basel, Switzerland.^[2]

Background

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.^[3] 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.^[4] 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.^[5] 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.^[6]

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.^[7] 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.^[7] 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:^[8]

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.

Post crisis reforms

In July 2016, after the world markets had faced a number of crises, including terrorism and the UK's decision to leave the European Union, Carney sent a letter in late July 2016 to Finance Ministers attending the G20 Summit and to Central Bank Governors outlining the reforms the FSB had made^[9] indicating that the global economy and financial system had "continued to function effectively" and had "weathered" the "spikes in uncertainty and risk aversion", confirming that "this resilience in the face of stress demonstrates the enduring benefits of G20 post-crisis reforms." He emphasized the value of specific reforms that had been implemented by the Financial Stability Board stating that these had "dampened aftershocks from these events [world crises] rather than amplifying them". He expressed confidence in the FSB's strategies: "This resilience in the face of stress demonstrates the enduring benefits of G20 post-crisis reforms."^[10]

The FSB published the pre-G20 Summit letter^[11] in light of the "two spikes in uncertainty and risk aversion" weathered by the global economy and financial system as of late July 2016, which outlined its priorities for 2016:

i.Promoting a coordinated programme of reforms to deliver resilient sources of market-based finance, including addressing structural vulnerabilities associated with asset management activities; ii.Developing robust financial market infrastructure, including assessing policies on central counterparty resilience, recovery and resolvability, and recommending any necessary improvements; and iii.Supporting effective macroprudential arrangements, by drawing lessons from national experiences of the practical application of macroprudential policy frameworks and tools working in partnership with the International Monetary Fund and Bank for International Settlements.

In addition to the priorities listed above, the FSB was also:

i.Pursuing the full and consistent implementation of post-crisis reforms, while addressing material unintended consequences; ii.Addressing new and emerging vulnerabilities in the financial system, including those associated with conduct, correspondent banking and climate change; and iii.Monitoring the potentially systemic implications of financial technology innovations, and the systemic risks arising from operational disruptions.

Overview

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.^[12]

Membership

The following countries and organizations are listed as members of the FSB:^[13]

Organizations

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 Governor of the Bank of Canada

References

↑ Gabriele Steinhauser (31 March 2016). "Regulators Examine Financial Risks of Climate Change". WSJ.
↑ "Contact".
↑ "Genesis of the FSF". Financial Stability Forum. Archived from the original on 14 June 2008. Retrieved 30 April 2016.
↑ "Home/News". Financial Stability Forum. Archived from the original on 12 May 2009. Retrieved 30 April 2016.
↑ "Who we are". Financial Stability Forum. Archived from the original on 14 June 2008. Retrieved 30 April 2016.
↑ "Financial Stability Forum decides to broaden its membership" (PDF). Financial Stability Forum. 12 March 2009. Archived from the original on 11 April 2009. Retrieved 30 April 2016. CS1 maint: Unfit url (link)
1 2 "Press release: Financial Stability Forum meets in Rome".
↑ "Press release: Financial Stability Forum Recommends Actions to Enhance Market and Institutional Resilience".
↑ "FSB Chair updates G20 Finance Ministers and Central Bank Governors on progress in advancing the FSB's 2016 priorities". The Asian Banker. The Asian Banker. 24 July 2016. Retrieved 25 July 2016. The letter outlines the progress the FSB is making in advancing its priorities for 2016
↑ Szu, Ping Chan (24 July 2016). "G20: Chancellor eyes clarity on Brexit deal 'later this year' as vote raises global risks". The Telegraph. London, UK. Retrieved 25 July 2016.
↑ "FSB Chair updates G20 Finance Ministers and Central Bank Governors on progress in advancing the FSB's 2016 priorities". FSB. FSB. 24 July 2016. Retrieved 25 July 2016.
↑ "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.

External links

Financial Stability Board
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 Institution report "The Governance of the Financial Stability Board"

Central banks

Global

Global	Bank for International Settlements Basel Committee on Banking Supervision Financial Stability Board

By continent

Africa	Bank of Central African States Central Bank of West African States Bank of Algeria National Bank of Angola Bank of Botswana Bank of the Republic of Burundi Bank of Cape Verde Central Bank of the Comoros Central Bank of the Congo Central Bank of Djibouti Central Bank of Egypt Bank of Eritrea National Bank of Ethiopia Central Bank of The Gambia Bank of Ghana Central Bank of the Republic of Guinea Central Bank of Kenya Central Bank of Lesotho Central Bank of Liberia Central Bank of Libya Central Bank of Madagascar Reserve Bank of Malawi Central Bank of Mauritania Bank of Mauritius Bank Al-Maghrib (Morocco) Bank of Mozambique Bank of Namibia Central Bank of Nigeria National Bank of Rwanda Central Bank of São Tomé and Príncipe Central Bank of Seychelles Bank of Sierra Leone Central Bank of Somalia Bank of Somaliland South African Reserve Bank Bank of South Sudan Central Bank of Sudan Central Bank of Swaziland Bank of Tanzania Central Bank of Tunisia Bank of Uganda Bank of Zambia Reserve Bank of Zimbabwe

Americas	Central Bank of Argentina Central Bank of Aruba Central Bank of The Bahamas Central Bank of Barbados Bermuda Monetary Authority Central Bank of Brazil Bank of Canada Central Bank of Chile Bank of the Republic (Colombia) Central Bank of Cuba Central Bank of Curaçao and Sint Maarten Eastern Caribbean Central Bank Cayman Islands Monetary Authority Central Bank of Ecuador Bank of Guatemala Bank of the Republic of Haiti Central Bank of Honduras Bank of Jamaica Bank of Mexico Central Bank of Nicaragua Central Reserve Bank of Peru Central Bank of Suriname Central Bank of Trinidad and Tobago Federal Reserve System (United States) Central Bank of the Uruguay Central Bank of Venezuela

Asia	Da Afghanistan Bank Central Bank of Bahrain Bangladesh Bank Royal Monetary Authority of Bhutan Brunei Currency and Monetary Board Autoriti Monetari Brunei Darussalam National Bank of Cambodia People's Bank of China Hong Kong Monetary Authority Reserve Bank of India Bank Indonesia Central Bank of the Islamic Republic of Iran Central Bank of Iraq Bank of Israel Bank of Japan Central Bank of Jordan National Bank of Kazakhstan National Bank of the Kyrgyz Republic Bank of Korea Central Bank of the Democratic People's Republic of Korea Central Bank of Kuwait Banque du Liban Monetary Authority of Macao Bank Negara Malaysia Maldives Monetary Authority Bank of Mongolia Central Bank of Myanmar Nepal Rastra Bank Central Bank of Oman State Bank of Pakistan Palestine Monetary Authority Bangko Sentral ng Pilipinas Qatar Central Bank Saudi Arabian Monetary Authority Monetary Authority of Singapore Central Bank of Sri Lanka Central Bank of Syria Central Bank of the Republic of China (Taiwan) Bank of Thailand Central Bank of Turkmenistan Central Bank of the United Arab Emirates Central Bank of Uzbekistan State Bank of Vietnam Central Bank of Yemen

Europe	European Central Bank (Eurosystem) National Bank of the Republic of Abkhazia Bank of Albania Central Bank of Armenia National Bank of Austria Central Bank of Azerbaijan National Bank of the Republic of Belarus National Bank of Belgium Central Bank of Bosnia and Herzegovina Bulgarian National Bank Croatian National Bank Central Bank of Cyprus Czech National Bank Danmarks Nationalbank (Denmark) Deutsche Bundesbank (Germany) Bank of England Bank of Estonia Bank of Finland Banque de France National Bank of Georgia Bank of Greece Hungarian National Bank Central Bank of Iceland Central Bank of Ireland Banca d'Italia Central Bank of Kosovo Bank of Latvia Bank of Lithuania Central Bank of Luxembourg National Bank of the Republic of Macedonia Central Bank of Malta National Bank of Moldova Central Bank of Montenegro De Nederlandsche Bank Norges Bank Central Bank of the Turkish Republic of Northern Cyprus National Bank of Poland Banco de Portugal National Bank of Romania Central Bank of Russia National Bank of Serbia National Bank of Slovakia Bank of Slovenia Gosbank (Soviet Union) Bank of Spain Swedish National Bank Swiss National Bank Central Bank of the Republic of Turkey National Bank of Ukraine

Oceania	Reserve Bank of Australia Reserve Bank of Fiji Reserve Bank of New Zealand Bank of Papua New Guinea Central Bank of Samoa Central Bank of Solomon Islands National Reserve Bank of Tonga Reserve Bank of Vanuatu

Policies and implementation

Policies	Capital requirement Contractionary monetary policy Expansionary monetary policy Basel II Basel III Basel 4

Implementation	Capital control Discount rate Interest rates Money creation Open market operation Sovereign wealth fund

Bretton Woods system

International Monetary Fund World Bank Group International Bank for Reconstruction and Development International Centre for Settlement of Investment Disputes International Development Association International Finance Corporation Multilateral Investment Guarantee Agency

Lists

List of central banks Central banks and currencies of Africa Central banks and currencies of Asia-Pacific Central banks and currencies of the Caribbean Central banks and currencies of Europe Central banks and currencies of Central America and South America

Names in italics indicate non-sovereign (dependent) territories, former countries, or states with limited recognition

Coordinates: 47°32′53″N 7°35′30″E / 47.5481°N 7.5918°E / 47.5481; 7.5918

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