Governing Financial Stability: the Financial Stability Board as the Emerging Pillar in Global Economic Governance

Pagliari, S. (2013). Governing Financial Stability: the Financial Stability Board as the Emerging Pillar in Global Economic Governance. In: M Moschella (Ed.), Handbook of Global Economic Governance. . Routledge.

[img]
Preview
PDF - Accepted Version
Download (540kB) | Preview

Abstract

The Financial Stability Board represents the most important institutional innovation in the global economic governance architecture that has emerged from response the global financial crisis originated in the summer of 2007 from the US subprime mortgage markets. This institution was created by the G20 at the height of the global financial crisis with the task of urgently coordinating the international regulatory response to the crisis. However, rather than being a short-term fix in response to the crisis, the FSB has been given a central role in promoting international financial stability. In the words of the U.S. Treasury Secretary Timothy Geithner, the FSB should have become a ‘Fourth Pillar’ in global economic governance along with the IMF, the WB and the WTO (US Treasury 2009). However, this label overlooks the fact that the commonalities between the FSB and the other three pillars are far fewer that the elements that set these institutions apart. The FSB can rely in the pursuit of its mandate neither the large staff and financial resources of the IMF and World Bank, nor on the legal standing and the power to devise legally enforceable agreements of the WTO. Instead, the FSB’s mandate, internal structure,and membership make this a rather unique institution in the global economic governance architecture. How can we explain the unique nature of the FSB and the differences with other institutions that populate the existing global economic governance architecture? Whose preferences and paradigms are reflected in the evolution of the mandate, internal governance, and membership of the institution? And what kind of power is the FSB capable to exercise over the different players that populate the governance of international financial markets? These are the questions that will be analyzed in this chapter. The first section will provide a historical overview of the FSB starting from the emerging market crises of the late 1990s to the first significant revision of its Charter in 2012. The second section will explore the expansion in the tasks performed by the FSB over this period. This analysis will illustrate an evolution in the role of the FSB from being primarily a coordination mechanism to an institution capable to exercise a greater independent impact over the global economic governance. The third part will different measures introduced since the beginning of the crisis to strengthen the institutional bases of the FSB in support of the growing set of tasks. Finally, the fourth part will analyze the membership of the FSB. This section will discuss how the FSB has evolved from a narrow club to a more inclusive organisation, and how it interacts with those non-member countries.

Item Type: Book Section
Additional Information: Full acknowledgement must be given to the original source
Subjects: H Social Sciences
Divisions: School of Social Sciences > Department of International Politics
URI: http://openaccess.city.ac.uk/id/eprint/6814

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics