THE FINANCIAL STABILITY BOARD AND OTHER NEW MODES OF GOVERNANCE

Almost ten years after the beginning of the financial crisis, it is worth reflecting on the nature of the bodies established as a response to the downturn from an international law perspective. The Financial Stability Board will deserve much of the attention for two main reasons: firstly, its recent creation; and, secondly, its expected evolution towards a more permanent body. After surveying the structure and legal nature of the standard setting bodies in Section II, Section III examines the trait of “softness” which characterizes some international actors, generally those not grounded by treaty, and sources of law, mainly non-binding. The scope is first to demonstrate that standard setters can be defined as “soft organizations”, which can evolve towards more formal bodies bearing rights and obligations under international law. Secondly, I will investigate the role of soft law and why it has been so widely used in the governance of the financial markets. Section IV will focus on compliance, which is defined in this chapter as the “hard side” of soft law. For this purpose, after analyzing the recent developments within the FSB, I will provide a comparison with other mechanisms of compliance existing at the international level in human rights law, counter-terrorism and anti-money laundering. In the concluding part of the chapter, the objective is to demonstrate that, although the traditional concept of “sovereignty” has seemed “too narrow to respond to global threats and opportunities” , and soft law and soft organizations have prevailed, international law has proved to be equipped to explain the evolving structure of the global financial system.