Creating the Financial Stability Forum: What Role for Existing Institutions?

Abstract

The Financial Stability Forum (FSF)—now rebranded as the Financial Stability Board (FSB)—has become a focal point for financial regulatory initiatives in the aftermath of the 2008 Global Financial Crisis. Despite its central status, the body has received little attention from scholars. This is particularly striking both in light of the increasing centrality of the FSF/FSB within the realm of financial regulatory governance and the body's unusual structure and composition. Indeed, the creation and design of the FSF pose an empirical puzzle: what explains the creation of a new, informal and loosely structured institution and the centre of a financial regulatory governance regime? At the time of the Forum's creation, the broader financial architecture was marked by significant institutional density, with a large number of international organisations engaged in governance activities. This paper argues that it is precisely the structure and activities of these existing institutions, particularly the International Monetary Fund, the Bank for International Settlements and the Joint Forum on Financial Conglomerates, which account for the creation and design of the FSF, and points to the need for scholars to take seriously the role of organisations operating within institutionally dense spaces.