By John Lipsky
The devastating impact of the global financial crisis created a consensus that pre-crisis financial regulation didn’t take the “big picture” of the system as a whole sufficiently into account and, as a result, supervisors in many markets “missed the forest for the trees.” In other words, they did not take into account the macro-prudential aspects of regulation, which has now become the focus of many authorities.
Consensus regarding the need for macro-prudential regulation is particularly striking—previously this type of regulation had been used relatively little and, at present, there are no agreed standards that can be applied internationally. Continue reading
Filed under: Economic Crisis, Financial Crisis, Financial regulation, Financial sector supervision, IMF, International Monetary Fund | Tagged: cross-border exposures, global crisis, Macro-prudential policies: Asian perspectives, macroprudential regulation, Microprudential regulations, Shanghai conference, standard-setting bodies, systemic risk | 22 Comments »