Post-Crisis Financial Reform: Where Do We Stand?

Abstract

The post-crisis financial reform agenda is broad and complex, ranging from strengthening prudential regulation; to enhancing supervision; from mitigating pro-cyclicality to integrating micro- and macro-prudential oversight; from reducing the systemic risk associated with large and complex financial institutions to expanding resolution process and fortifying financial market structure. Reforms are proceeding slowly but important building blocks have been laid down, such as Basel III, other difficult reforms are in the making, such as the resolution framework for cross-border financial institutions or how to deal with systemically important financial institutions. However, differences are emerging in the approach to and in the implementation of reforms among jurisdictions, that might make the playing field more uneven, favor regulatory arbitrage, create distorting incentives, and generate new fault lines in the system.

Keywords: Financial crisis, financial reform