In October 2007, the Financial Stability Forum (FSF) was asked by G7 Ministers and Central Bank Governors to undertake an analysis of the causes of and weaknesses leading to the recent market turmoil which first broke out in the summer of 2007. On 12 April 2008, having carried out this analysis, the FSF presented to the G7 Ministers and Governors a report (Report) making recommendations for enhancing the resilience of markets and financial institutions.

In summary, the Report recommends action in five areas:

- Strengthened prudential oversight of capital, liquidity and risk management.

- Enhanced transparency and valuation.

- Changes in the role and uses of credit ratings.

- Strengthened responsiveness to risks on the part of the authorities.

- Robust arrangements for dealing with stress in the financial system.

The FSF concludes that it is essential that steps are taken now to enhance the resilience of the global financial system. A number of public and private sector initiatives are underway in the areas identified. The FSF intends to facilitate coordination of these initiatives and oversee their timely implementation in a way which avoids exacerbating stress in the short term.

Commenting on the Report in a speech on 11 April 2008 at the Brookings Institute, Washington, Alistair Darling, Chancellor of the Exchequer, said the FSF had made a number of important recommendations which must be "met with a clear commitment to act at both a national and international level".

The FSF will report on progress in June 2008 and will issue a further follow-up report in September 2008.