Financial Stability Board

Last updated

Financial Stability Board
FormationApril 2009;11 years ago (2009-04)
Type Verein
Headquarters Basel, Switzerland
Randal K. Quarles [1]
Secretary General
Dietrich Domanski
Affiliations Bank for International Settlements, G20
Staff (2017)
Formerly called
Financial Stability Forum (FSF)

The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established after the 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. Hosted and funded by the Bank for International Settlements, the board is based in Basel, Switzerland. [2]



Financial Stability Forum

The FSB's predecessor organization, the Financial Stability Forum (FSF), had emerged from a group of finance ministries, central bankers, and international financial bodies, which had been founded in 1999 to promote international financial stability by the finance ministers and central bank governors of G7 countries. [3] The FSF facilitated discussion and cooperation 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 15 November 2008, it was agreed that the membership of the FSF will be expanded to include emerging economies, such as China. The 2009 G20 London summit decided to establish a successor to the FSF, the Financial Stability Board (FSB) to include members of the G20 who had not been FSF members. [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 and Organisation for Economic Co-operation and Development with regard to sovereign wealth funds. The International Monetary Fund is working closely with sovereign wealth funds to identify a set of voluntary best practice guidelines, and is focusing on the governance, institutional arrangements and transparency of sovereign wealth funds. [7] On 12 April 2008, the FSF delivered a report to the G7 Finance Ministers detailing its recommendations: [8] [9]

2012 reforms

The High-Level Panel on the Governance of the FSB was an independent initiative coordinated by Domenico Lombardi of the Brookings Institution and funded by the Connect U.S. Fund. It assembled a high-level panel of experts, including Uganda's former Finance Minister and Central Bank Governor of Uganda Ezra Suruma, former Prime Minister of Kyrgyzstan Djoomart Otorbaev, former Finance Minister of Colombia José Antonio Ocampo, and Jacques Mistral, a former member of France's Council of Economic Analysis. [10] Lombardi published the panel's final report in September 2011 as a Brookings Issue Paper, concluding that the FSB's governance had not evolved as quickly as its prominence. It made several recommendations: [11]

At the 2011 G20 Cannes summit, the G20 called for a strengthening of the FSB's capacity resources and governance by establishing the FSB "on an enduring organizational basis". [12] In its 2012 report to the G20 Los Cabos summit, the FSB set out concrete steps to strengthen the organization's capacity, resources, and governance as well as establish it on an enduring organizational footing. The G20 endorsed the FSB's restated and amended charter. [13] In January 2013, the FSB became a separate legal entity in the form of an association or "Verein" under Swiss law, when its Articles of Association were adopted by the FSB Plenary. [14]

The FSB is hosted and funded by the Bank for International Settlements under a five-year agreement executed between the two in January 2013. The bank bears the majority of the FSB's operating expenses, and the FSB does not have any assets, liabilities, or revenue. [14]

2016 reforms

In late 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 to Finance Ministers attending the G20 Summit and to Central Bank Governors outlining the reforms the FSB had made [15] 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 [global financial crises] rather than amplifying them". He expressed confidence in the FSB's strategies, stating that "resilience in the face of stress demonstrates the enduring benefits of G20 post-crisis reforms". [16]

The FSB published the pre-G20 summit letter [17] 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:

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

In November 2016, the FSB and the board of the Bank for International Settlements agreed to a further five-year extension of the agreement from January 2018 to 2023. [14]


The FSB represented the G20 leaders' first major international institutional innovation. U.S. Treasury Secretary 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 International Monetary Fund, World Bank, and the World Trade Organization. Chairman of the board is the Canadian Mark Carney, Governor of the Bank of England. [18]

Unlike most multilateral financial institutions, the FSB lacks a legal form and any formal power, given that its charter is an informal and nonbinding memorandum of understanding for cooperation adopted by its members. [11]


The FSB has 68 member institutions, comprising ministries of finance, central banks, and supervisory and regulatory authorities from 25 jurisdictions as well as 10 international organizations and standard-setting bodies, and 6 Regional Consultative Groups reaching out to 65 other jurisdictions around the world. [14] [19]

Members include:

Standard-setting bodies


As a 2011 Brookings Institution report noted, there are no set rules for how the FSB chair is selected, reflecting the FSB's newness as well as the "central banking culture of discretion and informality that permeates the institution". [11]

Related Research Articles

International Monetary Fund International financial institution

The International Monetary Fund (IMF) is an international organization headquartered in Washington, D.C., consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on the World Bank for its resources. Formed in 1944 at the Bretton Woods Conference primarily by the ideas of Harry Dexter White and John Maynard Keynes, it came into formal existence in 1945 with 29 member countries and the goal of reconstructing the international payment system. It now plays a central role in the management of balance of payments difficulties and international financial crises. Countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money. As of 2016, the fund had XDR 477 billion.

Bank for International Settlements International financial institution owned by central banks

The Bank for International Settlements (BIS) is an international financial institution owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through its meetings, programmes and through the Basel Process – hosting international groups pursuing global financial stability and facilitating their interaction. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

The global financial system is the worldwide framework of legal agreements, institutions, and both formal and informal economic actors that together facilitate international flows of financial capital for purposes of investment and trade financing. Since emerging in the late 19th century during the first modern wave of economic globalization, its evolution is marked by the establishment of central banks, multilateral treaties, and intergovernmental organizations aimed at improving the transparency, regulation, and effectiveness of international markets. In the late 1800s, world migration and communication technology facilitated unprecedented growth in international trade and investment. At the onset of World War I, trade contracted as foreign exchange markets became paralyzed by money market illiquidity. Countries sought to defend against external shocks with protectionist policies and trade virtually halted by 1933, worsening the effects of the global Great Depression until a series of reciprocal trade agreements slowly reduced tariffs worldwide. Efforts to revamp the international monetary system after World War II improved exchange rate stability, fostering record growth in global finance.

Hans Eichel German politician

Hans Eichel is a German politician (SPD) and the co-founder of the G20, or "Group of Twenty", an international forum for the governments and central bank governors of twenty developed and developing nations to discuss policy issues pertaining to the promotion of international financial stability.

State Bank of Pakistan central bank

The State Bank of Pakistan (SBP) is the central bank of Pakistan. While its constitution, as originally laid down in the State Bank of Pakistan Order 1948, remained basically unchanged until January 1, 1974, when the bank was nationalized, the scope of its functions was considerably enlarged. The State Bank of Pakistan Act 1956, with subsequent amendments, forms the basis of its operations today. The headquarters are located in the financial capital of Pakistan, Karachi whereas the bank has a fully owned subsidiary with the name SBP Banking Services Corporation (SBP-BSC) which is the operational arm of the central bank and has branch offices in 15 cities across Pakistan, including the capital city Islamabad and the four provincial capitals and has head office in Karachi. State bank has other fully owned subsidiaries as well namely, I) National Institute of Banking and Finance (NIBAF) which is the training arm of the bank and also provides training to commercial banks, 2) Deposit Protection Corporation (DPC) and recently SBP was given ownership of 3) Pakistan Security Printing Corporation (PSPC) as well...

Roger W. Ferguson Jr. American politician and lawyer

Roger W. Ferguson Jr. is an American economist, who was Vice Chairman of the Board of Governors of the Federal Reserve System from 1999 to 2006, and has served as President and Chief Executive Officer of the Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA) since April, 2008. In June, 2016, Alphabet Inc. appointed Roger W. Ferguson Jr. to its board of directors.

Bank of Korea central bank

The Bank of Korea is the central bank of the Republic of Korea and issuer of South Korean won. It was established on June 12, 1950 in Seoul, South Korea.

The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, or The Group of 24 (G-24) was established in 1971 as a chapter of the Group of 77 in order to help coordinate the positions of developing countries on international monetary and development finance issues, as well as and to ensure that their interests are adequately represented in negotiations on international monetary matters. Though originally named after the number of founding Member States, it now has 28 Members. Although the G-24 officially has 28 member countries, any member of the G-77 can join discussions.

G20 International forum of 19 countries and the EU

The G20 is an international forum for the governments and central bank governors from 19 countries and the European Union (EU). Founded in 1999 with the aim to discuss policy pertaining to the promotion of international financial stability, the G20 has expanded its agenda since 2008 and heads of government or heads of state, as well as finance ministers and foreign ministers, have periodically conferred at summits ever since. It seeks to address issues that go beyond the responsibilities of any one organization.

Central Bank of the United Arab Emirates central bank

The Central Bank of the United Arab Emirates is the state institution responsible for managing the currency, monetary policy and banking regulation in the United Arab Emirates (UAE).

Sir Paul Tucker is a British economist, central banker, and author. He was formerly the Deputy Governor of the Bank of England, with responsibility for financial stability, and served on the Bank's Monetary Policy Committee from June 2002 until October 2013 and its interim and then full Financial Policy Committee from June 2011. In November 2012 he was turned down for the position of governor in favour of Mark Carney. In June 2013, Tucker announced that he would leave the Bank of England, and later that he would be moving to Harvard. He was knighted in the 2014 New Year Honours for services to central banking. His book, Unelected Power, was published in May 2018.

Mark Carney Central banker

Mark Joseph CarneyOC is an economist and banker who served as the Governor of the Bank of England from 2013 to 2020. He holds Canadian, British and Irish citizenship and was Chairman of the Financial Stability Board from 2011 to 2018.

The Financial Stability Forum (FSF) was a group consisting of major national financial authorities such as finance ministries, central bankers, and international financial bodies. It was first convened in April 1999 in Washington. At the 2009 G20 London summit, the G20 nations established a successor to the FSF, called the Financial Stability Board with an expanded membership and broadened mandate.

Malcolm D. Knight is a Canadian economist, policymaker and banker. He is currently Visiting Professor of Finance at the London School of Economics and Political Science and a Distinguished Fellow at the Center for International Governance Innovation. From 2008 to 2012, Knight was Vice Chairman of Deutsche Bank Group where he was responsible for developing and coordinating the bank's global approach to issues in financial regulation, supervision, and financial stability. He served as General Manager of the Bank for International Settlements from 2003 to 2008 and as Senior Deputy Governor of the Bank of Canada (1999-2003), after holding senior positions at the International Monetary Fund (1975-1999).

2009 G20 London summit

The 2009 G20 London Summit was the second meeting of the G20 heads of government/heads of state, which was held in London on 2 April 2009 at the ExCeL Exhibition Centre to discuss financial markets and the world economy. It followed the first G20 Leaders Summit on Financial Markets and the World Economy, which was held in Washington, D.C. on 14–15 November 2008. Heads of government or heads of state from the G20 attended, with some regional and international organisations also represented. Due to the extended membership, it has been referred to as the London Summit.

Harris Georgiades is a Greek Cypriot economist and politician. He was pivotal in the successful implementation of the economic reform plan for Cyprus and its successful conclusion in 2016.

Ashraf Mahmood Wathra was the 18th Governor of State Bank of Pakistan. He was appointed as the State Bank Governor on 29 April 2014 and served till 28 April 2017.

Lesetja Kganyago South African banker

Lesetja Kganyago is a South African economist and central banker. He is the Governor of the South African Reserve Bank (SARB). He was appointed to that post on 6 October 2014, by Jacob Zuma, the former President of the Republic of South Africa (RSA). He assumed the Governorship of the South African Reserve Bank on 9 November 2014, following the expiry of the term of his predecessor Gill Marcus, on 8 November 2014.

Guido Sandleris

Guido Sandleris is an Argentine economist and was President of the Central Bank of Argentina between 2018 and 2019.

Carolyn A. Wilkins Canadian economist

Carolyn A. Wilkins is a Canadian economist currently serving as Senior Deputy Governor of the Bank of Canada. Wilkins was appointed to the position of Senior Deputy Governor on May 2, 2014, and will serve a term of seven years. Wilkins is also a member of the Bank of Canada's Board of Directors. Wilkins is the first woman to hold the position of Senior Deputy Governor, and is the second-highest ranking official at the Bank under the Governor of the Bank of Canada.


  1. "Federal Reserve Board - Randal K. Quarles, Vice Chair for Supervision". Board of Governors of the Federal Reserve System. 1 March 2019. Retrieved 12 May 2019.
  2. "Contact".
  3. "Genesis of the FSF". Financial Stability Forum. Archived from the original on 14 June 2008. Retrieved 30 April 2016.
  4. "Home/News". Financial Stability Forum. Archived from the original on 12 May 2009. Retrieved 30 April 2016.
  5. "Who we are". Financial Stability Forum. Archived from the original on 14 June 2008. Retrieved 30 April 2016.
  6. "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)
  7. 1 2 "Press release: Financial Stability Forum meets in Rome".
  8. Report of the Financial Stability Forum on Enhancing Market and Institutional Resilience (PDF). Financial Stability Forum. 7 April 2008.
  9. "Press release: Financial Stability Forum Recommends Actions to Enhance Market and Institutional Resilience".
  10. "What We Do: High-Level Panel on the Governance of the Financial Stability Board". New Rules for Global Finance. Retrieved 11 February 2018.
  11. 1 2 3 Domenico Lombardi (September 2011). The Governance of the Financial Stability Board (PDF). Washington, DC: Brookings Institution. Retrieved 11 February 2018.
  12. "Our History". Financial Stability Board. Retrieved 11 February 2018.
  13. Report to the G20 Los Cabos Summit on Strengthening FSB Capacity, Resources and Governance (PDF). Financial Stability Board. 12 June 2012. Retrieved 11 February 2018.
  14. 1 2 3 4 Financial Stability Board (December 2017). 4th Annual Report (PDF). Basel: Financial Stability Board.
  15. "FSB Chair updates G20 Finance Ministers and Central Bank Governors on progress in advancing the FSB's 2016 priorities". 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
  16. 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.
  17. "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.
  18. "Mark Carney gets chance to reshape Bank of England after departure of deputy governor". Financial Post . 13 June 2013. Retrieved 20 June 2013.
  19. "Links to FSB members". Financial Stability Board. Retrieved 17 November 2011.

Coordinates: 47°32′53″N7°35′30″E / 47.5481°N 7.5918°E / 47.5481; 7.5918