Cooperation on Financial Stability
Domestic Cooperation on Financial Stability
The Financial Stability Oversight Council (FSOC), created in 2010 under the Dodd-Frank Act and chaired by the U.S. Treasury Secretary, draws on the expertise of the Federal Reserve and 14 other federal and state financial-industry regulators to proactively identify risks to financial stability, promote market discipline, and respond to emerging threats. The Chair of the Federal Reserve is a member of the FSOC, and the Federal Reserve works to support the activities of the FSOC and other U.S. government agencies in the pursuit of financial stability.
The Financial Stability Oversight Council meets frequently to coordinate on financial stability topics that might affect the U.S. economy and makes publicly available its meeting minutes, annual report, and various other studies and statements.
Global Cooperation on Financial Stability
The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It also coordinates national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory, and other financial sector policies.
The Federal Reserve Board and other U.S. agencies participate in FSB efforts, which specifically seek to coordinate the development of regulatory, supervisory, and other financial sector policies that are consistent across the globe.
Nearly all developed and developing nations maintain central banks to promote a sound and stable financial system and well-functioning economies. Indeed, Federal Reserve officials engage regularly and collectively with other central banks to discuss broad trends affecting the global financial system; one-on-one bank engagement also occurs in special circumstances where coordination and cooperation can help keep the global financial system operating smoothly.
The Bank for International Settlements seeks, among other things, to foster discussion and facilitate collaboration among central banks and supports dialogue with other authorities that are responsible for promoting financial stability. The Federal Reserve participates in the deliberations of this financial organization, whose members include 60 central banks, representing countries from around the world that together make up about 95 percent of world gross domestic product.
G7 & G20
The Group of Seven (G7) is an informal bloc of industrialized democracies (also including Canada, France, Germany, Italy, Japan, and the United Kingdom) that meets to discuss global economic issues. The Group of 20 (G20) is an international forum, which includes the G7 plus other major economies around the world. Federal Reserve officials engage regularly with the G7 and G20 to discuss macroeconomic policy surveillance; the international financial system; and a wide range of policy issues and proposals to encourage strong, sustainable, and balanced growth.
The International Monetary Fund (IMF) works to “foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.” The Federal Reserve is a member of the International Monetary and Financial Committee, which advises and reports to the IMF Board of Governors on the supervision and management of the international monetary and financial system, including on responses to unfolding events that may disrupt the system.
The Organisation for Economic Co-operation and Development (OECD) promotes “policies that will improve the economic and social well-being of people around the world.” The Federal Reserve participates in several OECD forums to discuss current economic issues and projections for the global economic outlook and to promote policies that will improve global economic well-being.
The World Bank functions as a cooperative of 189 member countries. These member countries, or shareholders, are represented by a board of governors, who are the ultimate policymakers at the World Bank. Generally, the governors are member countries’ ministers of finance or ministers of development. The Federal Reserve interacts informally with the World Bank, largely through the International Monetary Fund.