##ize their banking system. now, they are reaping the benefits as the recovery in the united states gathers momentum. second, the overall coherence of the reforms, their proportionality relative to the risks and their macroeconomic effects are considered before the reforms are finalized and implemented. 21 third, concerns about possible adverse effects of these reforms on the financial system and, in particular, on market functioning, are being addressed by the fourth step in the fsb policy cycle. the fsb regularly and closely monitors the effectiveness of new regulations, keeping an eye out for any material unintended consequences. as we know only too well, the global economy and, in particular, the global financial system, are highly integrated. canada learned that lesson during the recent financial crisis, when adverse shocks spread rapidly through financial channels. we also know that the pace of global financial and economic integration will continue unabated. thus, to ensure the resilience of the global financial system and, ultimately, of the global economy, we need a global organization that can coordinate the necessary efforts, especially across borders, to tackle emerging gaps and weaknesses in financial regulation and supervision and thereby help to prevent future crises like the one we just experienced. for this we have the fsb – a post - financial - crisis institution for a post - financial - crisis world. thank you very much. the g - 20 leaders agreed that the fsb ’ s mandate should be strengthened ; that it be given permanent legal standing ; and that its capacity and resources be increased. 21. see “ assessing the macroeconomic impact of the transition to stronger capital and liquidity requirements ”, bank for international settlements, december 2010 ; “ assessment of the macroeconomic impact of higher loss absorbency for global systemically important banks ”, bank for international settlements, october 2011, and “ macroeconomic impact assessment of otc derivatives regulatory reforms ”, bank for international settlements, august 2013. bis central bankers ’ speeches

employment and improved living standards. the fsb was born of necessity in the aftermath of the financial crisis. its raison d ’ etre stems from one overarching fact : the global financial system is highly integrated. 2 financial institutions and markets are interconnected and interdependent within and across various the fsb grew out of the financial stability forum ( fsf ), founded in 1999 by the g - 7 in the wake of the financial crises in asia, latin america and russia. bank of canada deputy governor timothy lane, in his 2013 speech, “ financial stability in one country? ” argues that because of global financial integration, it is impossible to achieve financial stability in one jurisdiction by focusing exclusively on domestic considerations. bis central bankers ’ speeches sectors, including banking, insurance, and pension and investment funds, and, increasingly, across national jurisdictions. thus, to achieve a comprehensive and coherent approach to the financial regulation and oversight necessary to attain the global public good of financial stability, coordination is essential across countries, across all of the elements of the reforms, and across many different regulators and supervisors. failure to coordinate would lead to the fragmentation of the financial system, which would impede the global recovery. this need for effective coordination is why the g - 20 established the fsb in 2009. 3 what is the fsb? the fsb is not only the newest, it is by far the smallest – with only about 25 full - time staff – and probably the least well known of the major international organizations. 4 these include such postwar heavyweights as the international monetary fund ( imf ), the world bank and the organisation for economic co - operation and development ( oecd ). it is an international organization like no other : • its membership is composed of national financial authorities from 24 countries, including g - 20 members and other significant financial jurisdictions such as switzerland and singapore. 5 an important innovation is that it also includes international financial institutions such as the imf, the world bank and the bank for international settlements, as well as international bodies that set standards for banking, insurance, securities and accounting. 6 • the fsb punches well above its weight by levering the knowledge of its 70 member agencies, which are home to several thousand financial sector experts. it is these experts who do most of the heavy lifting, sitting on committees and working groups to develop policy and conduct peer reviews of implementation, supported by the small fsb secretariat. • at the fsb, decision making is based on