Financial Stability Board facts for kids
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| Abbreviation | FSB |
|---|---|
| Formation | April 2009 |
| Legal status | Swiss association |
| Headquarters | Basel, Switzerland |
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Chair
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Klaas Knot |
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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 |
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Formerly called
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Financial Stability Forum (FSF) |
The Financial Stability Board (FSB) is an international group that watches and gives advice about the world's money system. It was started in 2009 at a big meeting called the G20 Pittsburgh Summit. The FSB replaced an older group known as the Financial Stability Forum (FSF).
The FSB includes all the main G20 countries, members from the old FSF, and the European Commission. The Bank for International Settlements helps host and fund the FSB. Its main office is in Basel, Switzerland. The FSB is set up as a special kind of non-profit group under Swiss law.
The FSB was a new and important idea from the G20 leaders. It was seen as a key part of how the world manages its money, alongside groups like the International Monetary Fund, World Bank, and World Trade Organization.
Unlike some other big financial groups, the FSB does not have a formal treaty or official power. Instead, it works by getting its members to agree to cooperate.
Contents
How the FSB Started
The Financial Stability Forum
Before the FSB, there was a group called the Financial Stability Forum (FSF). It was created in 1999 by finance ministers, central bankers, and international financial groups. Their goal was to help make the world's money system more stable.
The FSF helped people talk and work together on how to watch over banks, financial deals, and money events. A small team managed the FSF from the Bank for International Settlements in Basel, Switzerland.
The FSF had about a dozen countries as members. These included the United States, Japan, Germany, the United Kingdom, France, Italy, Canada, and Australia. Several international money groups were also members.
In November 2008, G20 leaders decided to add more countries to the FSF, like China. Then, at the 2009 G20 London summit in 2009, they decided to create the Financial Stability Board (FSB). This new group would include all G20 members, even those who were not part of the FSF.
Creating the FSB
The Financial Stability Forum met in Rome in March 2008. They talked about problems in the money markets and how to fix them. They also prepared a report for the G7 Finance Ministers.
This report pointed out key weaknesses that led to money problems. It also suggested ways to make the financial system stronger. The FSF's recommendations included:
- Making sure banks have enough money and manage risks well.
- Being more open about money information and how things are valued.
- Changing how credit ratings are used.
- Helping authorities respond better to risks.
- Having strong plans for dealing with big problems in the financial system.
Making the FSB Stronger
In 2011, experts looked at how the FSB was run. They suggested that the FSB needed to become stronger and more organized.
At the 2011 G20 Cannes summit, the G20 leaders agreed. They asked the FSB to become a more lasting organization. In 2012, the FSB shared its plans to become stronger and more organized. The G20 leaders approved these plans.
In January 2013, the FSB officially became a separate legal group under Swiss law. This meant it could act on its own. The Bank for International Settlements continues to host and fund the FSB under a special agreement.
FSB's Work in 2016
In July 2016, after some big world events like the UK's decision to leave the European Union, the head of the FSB, Mark Carney, wrote a letter. He told finance ministers that the world's money system had stayed strong. He said this showed that the changes made by the G20 after the 2008 crisis were working.
The FSB listed its main goals for 2016:
- Helping to make sure there are strong ways for businesses to get money.
- Building strong financial systems, like how payments are handled.
- Learning from countries that have used special rules to keep their money systems stable.
The FSB also worked on:
- Making sure all the agreed-upon money reforms were fully put into action.
- Looking at new risks, like those from new technologies or climate change.
In November 2016, the FSB and the Bank for International Settlements agreed to continue their partnership until 2023.
Who is in the FSB and Who Leads It?
The FSB has 71 member groups. These include finance ministries, central banks, and financial watchdogs 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.
Members include:
- Organizations
- 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
Chairs of the FSB
The person who leads the FSB is called the Chair. There are no strict rules for how the Chair is chosen. This shows how new the FSB is and how it often works in a less formal way.
Here are the people who have been the Chair of the FSB:
- Mario Draghi (2009–2011), who was the Governor of the Bank of Italy.
- Mark Carney (2011–2018), who was the Governor of the Bank of Canada and later the Governor of the Bank of England.
- Randal Quarles (2018–2021), who was a Vice Chair for Supervision at the U.S. Federal Reserve.
- Klaas Knot (2021–present), who is the President of De Nederlandsche Bank.
See also
In Spanish: Consejo de Estabilidad Financiera para niños
