The Financial Stability Board was established at the G20 summit in 2009, when leaders were faced with the reality that a full blown financial crisis was well underway. It was the first substantive achievement of the group, which had been clamouring to replace the smaller, time - worn G7  as the world’s economic overlord from the time Paul Martin started calling  together his fellow finance ministers a decade earlier. Further, the existing international regulatory bodies, notably but not exclusively the Financial Stability Forum, were structurally unable to deal with a major crisis.

At next week’s G20 summit leaders are expected to announce their choice of a new chairman for the FSB, which has been baby-sat in its infancy briefly by an American, followed by an Italian central banker. To date the FSB world has unfolded in the time honoured tradition of the Americans and the Europeans running almost everything economic, and furthermore has done little of importance. Yet it does have the capacity to play a significant role in guiding the international financial community through stormy weather: it has broader membership than the FSF, including those emerging countries with significant financial institutions. (China has three of the top five banks in the world as measured by market cap; Hong Kong and Singapore are major financial centres, India and Brazil are financially sophisticated.)  It also includes policy makers in its governance structure, so it has more political clout. 

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