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Financial Stability Board
FSBlogo.jpg
Founded April 1999
Headquarters Basel, Switzerland
Products Global group of regulators
Twitter ID @FinStbBoard
LinkedIn financialstabilityboard
Web site FSB Homepage
Releases Organization News

The Financial Stability Board (FSB) is an entity established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability.

FSB brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.

Framework

The FSB’s structure contains a framework for the identification of systemic risk in the financial sector, for framing policy to address these risks, and for overseeing implementation of those responses. The Plenary is the board's decision-making body. The FSB also contains a steering committee and three standing committees, each with specific and complementary responsibilities:

  • The Standing Committee on Assessment of Vulnerabilities (SCAV), which is the FSB’s main mechanism for identifying and assessing risks
  • The Standing Committee on Supervisory and Regulatory Cooperation (SRC), which is charged with undertaking further supervisory analysis or framing a regulatory or supervisory policy response to a material vulnerability identified by SCAV.
  • The Standing Committee on Standards Implementation (SCSI), which is responsible for monitoring the implementation of agreed FSB policy initiatives and international standards.

The FSB’s decisions are not legally binding on its members – instead the organization operates by moral suasion and peer pressure, in order to set internationally agreed policies and minimum standards that its members commit to implementing.

History

The Financial Stability Forum originated on Oct. 3, 1998, when the finance ministers and central bank governors of the G7 countries commissioned Dr. Hans Tietmeyer, president of the Deutsche Bundesbank, to recommend a new structure to enhance co-operation among the national and international supervisory bodies and international financial institutions to promote international financial stability. Tietmeyer recommended the creation of a Financial Stability Forum.

In April 2009, an expanded FSF was re-established as the Financial Stability Board (FSB) with a broadened mandate to promote financial stability.[1]

The FSB met March 11-12, 2009 in London. Members discussed risks and vulnerabilities in the financial markets and what could be done to address them.[2]

In mid March of 2009, it was reported that three major hedge fund industry bodies had written to the FSB to commit to working towards global industry standards for the first time ever. The Alternative Investment Management Association (AIMA), the President's Working Group (PWG) and the Managed Funds Association (MFA) told the FSB that they would achieve convergence in areas such as regulatory supervision and reporting risk positions, according to a source. The letter came as the FSB put forward recommendations to Group of 20 finance ministers who proposed that hedge funds or their managers should be registered and disclose information needed to assess systemic risks they pose.[3]

The FSB met in Paris on Sept. 15, 2009. This was the second plenary meeting of the FSB since its establishment in April 2009.[4]

In April of 2011, the Financial Stability Board warned European fund managers of tighter regulations regarding exchange-traded funds. The FSB is specifically concerned about 'plain vanilla' and swap-based exchange traded funds, which could lead to liquidity issues. [5]

Member Institutions


Key People

  • Mark Carney, governor of the Bank of England, was appointed by the Plenary as chair of the FSB. He is the principal spokesperson for the FSB and represents the FSB externally.

Other chairpersons have included Mario Draghi, governor of the Banca d'Italia, Andrew Crockett, General Manager of the Bank for International Settlements and Roger W. Ferguson, Vice Chairman of the Board of Governors of the Federal Reserve System.[6]

References

  1. Financial Stability Forum re-established as the Financial Stability Board. FSB.
  2. Financial Stability Forum Meets in London. Financial Stability Forum.
  3. Hedge Fund Bodies Commit To Global Standards. Reuters.
  4. Financial Stability Board Meets in Paris. FSB.
  5. Regulators urged to keep eye on Europe's exchange traded funds. FT.
  6. Overview. Financial Stability Forum.