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G20 Financial Summit - Do you know who the Financial Stability Forum is? To become global overarching banking?


"The proposal being advanced would see the International Monetray Fund, first created at Bretton Woods, given only limited new surveillance powers, and instead see the lead global role go to a little-known organization that had a short and inauspicious existence before becoming the main forum over the last year for financial chiefs to debate ideas, hammer out differences, and appeal to other countries for joint action. 

Known as the Financial Stability Forum, the organization has a tiny staff based in Basel, Switzerland, and currently draws all its authority from its membership of finance ministries, central banks, supervisors and regulators from an eclectic mix of countries and territories first brought together by the Asian financial crises, from Canada and the U.K. to Singapore and Hong Kong. 

It has acted in the last year as a workshop where financial chiefs have rolled up their sleeves behind closed doors and tried to figure out what to do in the face of the kind of financial crisis that occurs once in a lifetime. 

"The Financial Stablity Forum has stepped up," said one central banker. 

Several of the recent market interventions by Ottawa have their genesis in meetings of the FSF, while banks have worked closely with the body. 

"I think the FSF is a very viable vehicle," said the head of a Canadian bank. 

But one of the first tasks in preparing the FSF for its new expanded role is widening its membership to include the big emerging economies, he said. 

"We need China, Russia, Brazil at the table because that is where the growth is," said the Canadian bank head. 

An IMF official told the Financial Post that the stability forum was likely to expands it membership long before the monetary fund reformed an outdated quota system that gives European nations disproportionate representation on its board at the expense of fast-growing economies. 

The official said the chance of a sudden breakthrough at the IMF seemed remote, and indicated the momentum for a radically new role for the fund had dissipated. 

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