The activity of the Financial Stability Board is now concentrating, in accordance with the mandate given by the Seoul Summit of the G20, on the moral hazard problem posed by systemically important financial institutions (SIFIs), those that in the latest crisis and earlier ones were considered too large, or too complex and interconnected, to be allowed to fail and that have often received injections of public capital.
Knowing that they cannot fail encourages them to take greater risks, while the markets finance them at lower interest rates than they apply to intermediaries exposed to the risk of failure.