CGFS - Mandate

As approved by the Governors of the G10 central banks on 8 February 1999

The Committee on the Global Financial System is a central bank forum for the monitoring and examination of broad issues relating to financial markets and systems with a view to elaborating appropriate policy recommendations to support the central banks in the fulfilment of their responsibilities for monetary and financial stability. In carrying out this task, the Committee will place particular emphasis on assisting the Governors in recognising, analysing and responding to threats to the stability of financial markets and the global financial system. More specifically, the Committee's primary objectives will be the following:

• To seek to identify and assess potential sources of stress in the global financial environment through a regular and systematic monitoring of developments in financial markets and systems, including through an evaluation of macroeconomic developments;
• To further the understanding of the functioning and underpinnings of financial markets and systems through a close monitoring of their evolution and in-depth analyses, with particular reference to the implications for central bank operations and broader responsibilities for monetary and financial stability;
• To promote the development of well-functioning and stable financial markets and systems through an examination of alternative policy responses and the elaboration of corresponding policy recommendations.

In its analysis, the Committee should pay particular attention to the nexus between monetary and financial stability, to the linkages between institutions, infrastructures and markets, to the actual and potential changes in financial intermediation and to the incentive structures built into markets and systems. The Committee should seek to increase the transparency of financial markets and systems by promoting the design, production and publication of statistics and other information by central banks - including through the BIS - and by recommending the adoption of appropriate disclosure standards by both the official and private sectors. Where relevant, the Committee should also contribute to the development of an international consensus on sound principles and norms.

The Committee is encouraged to co-operate with other national, supranational and international institutions with responsibilities for pursuing related objectives. In particular, it shall co-ordinate its activities with other Basel-based committees, such as the Basel Committee on Banking Supervision and the Committee on Payment and Settlement Systems, in order to strengthen the overall effectiveness of the process.