What is FSB?

The Financial Stability Board (FSB) was established upon the agreement of the G20 leaders at the London Summit in April, 2009 as the successor to the Financial Stability Forum (FSF). Its membership was expanded from the Group of Seven countries to the Group of 20, which includes FSF members and 12 more nations, such as Korea and the BRIC countries (Brazil, Russia, India and China), making the FSB the premier international body in charge of financial regulations.

Its membership includes national financial authorities and central banks; as well as international standard-setting bodies, such as the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS).

As a fourth pillar of global economic governance along with the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO), the FSB was mandated by the G20 leaders to promote global financial stability.

The FSB is in charge of making policy recommendations after consulting with national financial authorities and international standard-setting bodies (the BCBS, IOSCO and IAIS); and monitoring progress in each member’s implementation of international standards agreed by the G20 leaders.

Financial regulatory reforms currently under discussion at the FSB encompass a wide range of financial issues and are expected to bring a paradigm shift to the global financial markets and regulations.

The FSB Seoul Plenary meeting, scheduled for Wednesday, is the first of its kind to be held in emerging markets since the inception of the FSF in 1999.

The meeting is aimed at discussing and coordinating opinions among member countries so that the task of financial reform assigned by heads of G20 could be completed in the summit held in Seoul on Nov. 11 and 12.

This meeting will bring together about 70 heads of national authorities responsible for financial policy and supervision and central banks from 24 countries and 12 international financial institutions.

They will discuss reducing the moral hazard of systematically important financial institutions (SIFI), strengthening bank capital and liquidity regulation, reforming OTC derivatives market infrastructure, the FSB Outreach program and reducing dependence on external credit ratings and other major financial reform agendas.

The FSB Outreach program is held with non-member financial authorities to provide information on the FSB’s major financial reform agenda and encourage the implementation of the agenda as agreed at the G20 Toronto summit.

The FSB is chaired by Mario Draghi, governor of the Bank of Italy and its secretariat is located in Basel, Switzerland.