Waterloo, Canada – September 30 – The Financial Stability Board (FSB) should expand its scope, its geographical diversity and institutional capacity, and adopt a bottom-up approach to regional consultation, a high-level panel has concluded.
The Brookings-led panel of 14 of the world’s top financial stability experts features former finance ministers and central bank governors from Colombia, Spain, Thailand and Uganda, and includes CIGI Chair in International Political Economy Eric Helleiner and CIGI Senior Fellow Bessma Momani.
The panel put forth 12 recommendations for the FSB in seven keys areas: mandate, chair, staff, legal personality, regional consultative groups, transparency and evaluation. Among its recommendations, the panel urges the FSB to expand its framework for cooperation with the International Monetary Fund (IMF) to include the regulation of cross-border capital flows. The panel also suggests the FSB appoint a nominating panel and develop clear procedures for selecting its chair. It also calls for a substantial expansion of FSB staff in a manner that reflects “the broad geographical and institutional diversity” of its membership.
To enable the FSB to better implement these reforms and give the FSB an independent legal personality, the panel recommends the Board adopt “the most favorable and flexible corporate form offered by domestic law in a convenient national jurisdiction.” The panel also suggests the FSB’s regional consultative groups be determined through a bottom-up approach in a move toward universal membership.
"Participating in the panel provided a fascinating opportunity to hear diverse views from around the world, and to work toward common positions, regarding the governance of this new, yet vitally important, institution in the global financial architecture,” Eric Helleiner said.
For a full list of panel members and to read the high-level panel’s recommendations, visit http://www.brookings.edu/~/media/Files/events/2011/0923_financial_stability/Recommendations_FSB_Lombardi.pdf
To read panel rapporteur and Oxford Institute of Economic Policy President Domenico Lombardi’s report, The Governance of the Financial Stability Board, visit http://www.brookings.edu/papers/2011/0923_financial_stability_board_lombardi.aspx
About the FSB:
The Financial Stability Board was created at the height of the global financial crisis as a successor to the Financial Stability Forum—a group of finance ministries, central banks’ supervisory and regulatory authorities, and international financial bodies formed in 1999 to monitor and promote global financial stability. With a broadened mandate, a stronger institutional basis and enhanced capacity, the Financial Stability Board is now responsible for strengthening global financial supervision and regulation. However, despite its growing importance, there is limited knowledge as to how the Financial Stability Board operates, how it is governed and how it will effectively carry out the responsibility of ensuring global financial stability.
CIGI MEDIA CONTACT:
Declan Kelly, Communications Specialist
Tel: 519.885.2444, ext. 356, Email: dkelly@cigionline.org
BROOKINGS MEDIA CONTACT:
Mao-Lin Shen, Communications Director, Global Economy and Development Program
Tel: 202-797-6141 Email: mshen@brookings.edu
The Centre for International Governance Innovation (CIGI) is an independent, nonpartisan think tank on international governance. Led by experienced practitioners and distinguished academics, CIGI supports research, forms networks, advances policy debate and generates ideas for multilateral governance improvements. Conducting an active agenda of research, events and publications, CIGI’s interdisciplinary work includes collaboration with policy, business and academic communities around the world. CIGI was founded in 2001 by Jim Balsillie, co-CEO of Research In Motion (RIM), and collaborates with and gratefully acknowledges support from a number of strategic partners, in particular the Government of Canada and the Government of Ontario. For more information, please visit www.cigionline.org.