Financial Stability Board
The Financial Stability Board is an international body that coordinates global financial regulation and monitors systemic risks.
Meaning in Practice
The Financial Stability Board (FSB) develops regulatory standards and promotes consistent implementation across jurisdictions. It brings together national authorities, central banks, and international institutions to assess vulnerabilities in the global financial system. The FSB does not enact laws but issues recommendations and policy frameworks.
Why It Matters
The FSB strengthens international cooperation in financial supervision and crisis prevention. It helps reduce regulatory gaps and cross-border risks. Its work enhances global financial stability and resilience.
Market Impact
FSB policy recommendations can influence capital standards, resolution planning, and systemic risk oversight. Markets monitor its guidance for signals about future regulatory tightening or reforms. Global banks may adjust capital and compliance strategies accordingly.
Example
After the global financial crisis, the FSB coordinated reforms targeting systemically important banks and improved cross-border resolution frameworks.