Financial Stability Board

The Financial Stability Board is the international body that monitors and makes recommendations about the global financial system, established at the G20's April 2009 London Summit as the successor to the Financial Stability Forum, which had operated since 1999. The Forum had already met in Rome in March 2008 to examine emerging challenges in financial markets and delivered recommendations to G7 leaders that April addressing weaknesses the unfolding 2008 financial crisis was exposing; its reconstitution as the FSB the following year, with an expanded membership covering every G20 economy plus other jurisdictions and international bodies, was the G20 leaders' first major international institutional innovation in response to that crisis. Headquartered in Basel, Switzerland, the FSB has no treaty basis and no formal binding power, relying instead on an informal, nonbinding memorandum of understanding among its members for cooperation; then-US Treasury Secretary Timothy Geithner described it as functioning, in effect, as a fourth pillar of global economic governance alongside the IMF, World Bank and WTO.