Restructuring global governance of the financial system : a framework for preventing systemic risk

The paper focuses on various aspects pertaining the institutional architecture of financial regulation and supervision, especially for systemic risk control. Given that systemic risk focuses on risks to the financial system, the main goal of regulating/preventing systemic risks is preserving stability of the financial system. Protecting financial stability calls for fostering macro-prudential oversight. Hence the question is whether and how the architecture of the international financial system needs to be revised. In this framework it is underlined the transformation of the FSF into the FSB and its renewed role in the global governance. After a five- year period in its new role, the point at stake is whether the FSB is still an “arm” of the G20 or on the way to become a single “world financial regulator” and, moreover, whether the loose network-based structure must be replaced with a hierarchical system. Finally the paper highlights that, even if the FSB’s informal structure could be seen no longer for adequate, a recent declaration of the FSB’s Plenary emphasizes its role as ‘coordinator’ of other actors involved in ensuring financial stability and not as authority imposing legal international rules.