Posted on March 9, 2011 by iMFdirect
By Stijn Claessens and Ceyla Pazarbasioglu
(Version in Español)
Crises are like stories; they have a beginning, middle, and an end, and on occasion, we learn something along the way.
In times of crisis, choices must be made. In the most recent global economic crisis policymakers moved quickly to stabilize the system, providing massive financial support, which is the right response in the beginning of any crisis. But that only treated the symptoms of the global financial meltdown, and now a rare opportunity is being thrown away to tackle the underlying causes.
Without restructuring financial institutions’ balance sheets and their operations, as well as their assets ‒ loans to over-indebted households and enterprises ‒ the economic recovery will suffer, and the seeds will be sown for the next crisis. Continue reading
Filed under: Advanced Economies, Economic Crisis, Financial Crisis, Financial regulation, International Monetary Fund | Tagged: bank balance sheets, cross-border exposures, financial institutions, financial restructuring, financial sector, financial sector reform, financial sector regulation, financial system risk, global economic crisis, nonperforming loans, resolution mechanisms, restructure assets, stress tests, systemic risk | 8 Comments »
Posted on October 3, 2010 by iMFdirect
By José Viñals
Fearful financial markets, an uncertain growth outlook, fiscal anxieties, long unemployment lines….no other financial crisis since the Great Depression has led to such widespread dislocation in financial markets, with such abrupt consequences for growth, trade, and employment.
The crisis exposed fundamental weaknesses in many areas of the world economy, the most obvious being dramatic deficiencies in the regulation and supervision―nationally and internationally―of financial institutions and markets.
On the bright side, the crisis has provided the impetus for a major overhaul of the financial regulatory system. So, are we making the most of this opportunity to fix the system? Continue reading
Filed under: Economic Crisis, Financial Crisis, Financial regulation, IMF, International Monetary Fund | Tagged: Basel Committee on Banking Supervision, cross-border exposures, financial crisis, financial institutions, financial markets, Financial regulation, financial regulatory system, financial stability contribution, financial supervision, macroprudential regulations, Microprudential regulations, resolution mechanisms | 2 Comments »