The Compendium of Standards lists the various economic and financial standards - by both subject area and issuing body - that are internationally accepted as important for sound, stable and well functioning financial systems.
The international community attaches much importance to the adoption and implementation of these standards because of their beneficial effects on the stability of financial systems both at national level and globally.
The Compendium includes both key standards which the FSB has designated as deserving of priority implementation depending on country circumstances, and other standards that are complementary in nature and cover particular functional areas.
The Compendium is an initiative of the FSB and is a joint product with relevant international standard-setting bodies. It was first developed in 1999 by the Financial Stability Forum, the predecessor to the FSB. The Compendium is reviewed and updated periodically.
What Standards Are
Standards set out what are widely accepted as good principles, practices, or guidelines in a given area.
Standards may be classified by their scope:
- Sectoral These cover the economic and institutional sectors such as the government and central bank, banking, securities, and insurance industries, and the corporate sector.
- Functional Within each sector, standards cover areas such as governance, accounting, disclosure and transparency, capital adequacy, regulation and supervision, information sharing, risk management, payment and settlement, business ethics, etc.
From an implementation perspective, standards also differ in their specificity:
- Principles These are fundamental tenets pertaining to a broad policy area. Principles are usually set out in a general way and therefore offer a degree of flexibility in implementation to suit country circumstances.
- Practices These are more specific and spell out the practical application of the principles (drawing on country experiences) within a more narrowly defined context.
- Guidelines These provide detailed guidance on steps to be taken or requirements to be met in a particular area.
Why Standards Are Important
The development and implementation of internationally accepted economic, financial and statistical standards can help promote sound domestic financial systems and international financial stability. While a broad range of political, social, legal and institutional factors impinge on financial stability, the focus of the FSB is on economic and financial standards which are generally accepted by the international community as important for sound financial systems. The development, adoption, and successful implementation of international standards yields both national and international benefits. It helps to:
- strengthen domestic financial systems by encouraging sound regulation and supervision, greater transparency, and more efficient and robust institutions, markets, and infrastructure; and
- promote international financial stability by facilitating better-informed lending and investment decisions, improving market integrity, and reducing the risks of financial distress and contagion.
It is worth noting, however, that the implementation of standards in itself is not sufficient to ensure financial stability.
Standards are not an end in themselves but a means for promoting sound financial systems and sustained economic growth. They need to be continually reviewed in order to remain relevant in the face of changing circumstances. The relative importance of different standards to individual economies depends on their financial structure and other domestic circumstances. Their implementation must fit into a country's overall strategy for economic and financial sector development, taking account of its stage of development, level of institutional capacity, and other domestic factors. Successful implementation of standards involves a process of interpretation, application, assessment and, enforcement. It is critical that economies have in place an effective legal framework and infrastructure for enforcement.
Criteria for Inclusion of Standards in the Compendium
Standards included in the Compendium should:
- be materially relevant for fostering sound financial systems (relevant);
- clearly set out guidelines on good practices in a form that can be implemented (implementable);
- have been issued by an internationally recognised body in the relevant area (internationally recognised); and
- have broad applicability across different jurisdictions (widely applicable).
The first criterion clarifies that certain proposed standards, while useful, are not directly relevant for national authorities in fostering sound financial systems and should not therefore be included in the Compendium. Examples of such standards include guidelines by international bodies for the compilation and dissemination of economic statistics as well as highly specific guidance or broad guidelines on topics that are only indirectly relevant to sound financial systems. The above criteria also clarify that assessment methodologies should not be treated as separate standards but should instead be appended to their respective standards, and that only standards issued by an internationally recognised body (on a stand-alone basis or jointly with other bodies) in the relevant area should be considered for inclusion.
The standards highlighted here have been designated by the FSB as key for sound financial systems and deserving of priority implementation depending on country circumstances. These standards are broadly accepted as representing minimum requirements for good practice that countries are encouraged to meet or exceed.
View the list of the key standards.