Financial Stability Board facts for kids
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| Abbreviation | FSB |
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| Formation | April 2009 |
| Legal status | Swiss association |
| Headquarters | Basel, Switzerland |
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Chair
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Andrew Bailey |
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Secretary General
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John Schindler |
| Affiliations | Bank for International Settlements G20 |
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Staff (2017)
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33 |
| Website | https://www.fsb.org/ |
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Formerly called
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Financial Stability Forum (FSF) |
The Financial Stability Board (FSB) is an international group that helps keep the world's money systems safe and stable. It watches how money moves around the globe and gives advice on how to prevent big financial problems. The FSB was created in 2009 at a meeting of world leaders called the G20 Pittsburgh Summit. It replaced an older group known as the Financial Stability Forum (FSF).
The FSB includes all the main countries from the G20, which are the world's largest economies. It also includes members from the old FSF and the European Commission. The FSB is based in Basel, Switzerland. It works closely with and gets funding from the Bank for International Settlements. The FSB is set up as a not-for-profit group under Swiss law.
Some people see the FSB as a very important part of how the world manages its money. It's sometimes called a "fourth pillar" alongside other big organizations like the International Monetary Fund, the World Bank, and the World Trade Organization. Unlike some of these groups, the FSB doesn't have a formal treaty or official power. Instead, it relies on its members agreeing to work together and follow its advice.
How the FSB Started
The Financial Stability Forum
Before the FSB, there was a group called the Financial Stability Forum (FSF). This group was started in 1999 by finance ministers and central bankers from the G7 countries. The G7 are a group of seven major developed economies. The FSF's goal was to help countries talk and work together to keep financial systems stable. They looked at banks, financial deals, and big money events.
The FSF had a small team working from the Bank for International Settlements in Basel, Switzerland. Its members included about a dozen countries, like the United States, Japan, Germany, and the United Kingdom. It also included several international money organizations. In 2008, leaders at a G20 meeting decided to add more countries to the FSF, including fast-growing economies like China. Then, in 2009, at another G20 meeting in London, they decided to create the Financial Stability Board (FSB) to replace the FSF. The FSB would include all G20 members, even those who weren't part of the FSF before.
Creating the FSB
In March 2008, the Financial Stability Forum met in Rome. They talked about the problems in financial markets at the time and what could be done. They prepared a report for the G7 Finance Ministers. This report pointed out the main weaknesses that caused financial trouble. It also suggested ways to make financial markets stronger.
The FSF also discussed how to work with special government funds called sovereign wealth funds. In April 2008, the FSF gave its report to the G7 Finance Ministers. The report suggested several important actions:
- Make sure banks and financial groups have enough money and manage risks well.
- Be more open about financial information and how things are valued.
- Improve how credit ratings are used. Credit ratings are like grades for how risky a loan or investment is.
- Help authorities respond better to financial risks.
- Create strong plans for dealing with big problems in the financial system.
Changes in 2012
In 2011, a group of experts looked at how the FSB was run. They suggested that the FSB needed to grow and become more organized because it had become so important. At the 2011 G20 Cannes summit, the G20 leaders agreed. They asked the FSB to become a more permanent organization.
In 2012, the FSB presented a plan to the G20 Los Cabos summit. This plan showed how the FSB would become stronger and more organized. The G20 leaders approved the plan. In January 2013, the FSB officially became its own legal group under Swiss law. This meant it was now a formal association.
The Bank for International Settlements continues to host and fund the FSB. They signed a five-year agreement in 2013. The Bank for International Settlements pays for most of the FSB's daily costs. The FSB itself doesn't have its own money or debts.
Changes in 2016
In July 2016, after some global challenges like the UK's decision to leave the European Union, the head of the FSB, Mark Carney, wrote a letter to G20 Finance Ministers. He explained that the world's economy and financial system had stayed strong. He said this showed that the changes made by the G20 after past financial crises were working. These changes had helped to reduce the impact of big shocks.
The FSB listed its main goals for 2016:
- Encourage reforms to create strong ways for businesses to get money from markets. This included looking at how asset management works.
- Develop strong financial market infrastructure, which are the systems that allow money to move. This included checking rules for central clearinghouses, which help manage risks in financial deals.
- Support good macroprudential rules. These are rules that help keep the entire financial system stable, not just individual banks. The FSB worked with the International Monetary Fund and the Bank for International Settlements on this.
The FSB also aimed to:
- Make sure all the financial reforms decided after the 2008 crisis were fully put into action.
- Deal with new risks in the financial system. These included problems with how financial companies act, issues with correspondent banking (how banks send money across borders), and the effects of climate change.
- Watch for big risks from new financial technology (fintech) and problems that could stop financial systems from working.
In November 2016, the FSB and the Bank for International Settlements agreed to continue their funding agreement for another five years, until 2023.
Who is in the FSB?
The FSB has 71 member groups. These include finance ministries, central banks, and financial regulators from 25 countries. It also includes 13 international organizations and groups that set financial rules. Plus, there are 6 regional groups that connect to 65 other countries around the world.
Here are some of the countries that are members:
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(Singapore)
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1 Russian authorities have agreed not to participate in FSB meetings at present.
- Organizations that are members
- Bank for International Settlements
- International Monetary Fund
- The World Bank
- Organisation for Economic Co-operation and Development
- European Commission
- European Central Bank
- ECB Banking Supervision
- Groups that set financial rules
- Basel Committee on Banking Supervision
- Committee on Payments and Market Infrastructures
- Committee on the Global Financial System
- International Association of Insurance Supervisors
- International Accounting Standards Board
- International Organization of Securities Commissions
Leaders of the FSB
The person who leads the FSB is called the Chair. There aren't strict rules for how the Chair is chosen. This is because the FSB is still quite new, and it follows the informal way central banks often work.
Here are the people who have been the Chair of the FSB since it started:
- Mario Draghi (2009–2011): He was the Governor of the Bank of Italy and later became the President of the European Central Bank.
- Mark Carney (2011–2018): He was the Governor of the Bank of Canada and then the Governor of the Bank of England.
- Randal Quarles (2018–2021): He was a Vice Chair for Supervision at the U.S. Federal Reserve.
- Klaas Knot (2021–2025): He is the President of De Nederlandsche Bank.
- Andrew Bailey (2025–present): He is the Governor of the Bank of England.
fr:Conseil de stabilité financière
See also
In Spanish: Consejo de Estabilidad Financiera para niños
