International Finance Regulation: The Quest for Financial Stability

Conclusion What Can We Expect?

Financial stability is a long quest. It requires the financial world to regain trust and confidence from just about any part of society, as well as a process that will eradicate some of the least acceptable behaviors and implement a risk management culture.

Having walked the reader through this complex and arduous journey in global financial regulation, I now need to look at financial stability as it is being prepared by global regulation. There will be no quotes or references, just a plain expression of a personal opinion enlightened by several years of analysis of the consequences of the recent financial crises.

It would be unfair not to recognize the enormous task that has been undertaken and the tens of thousands of regulatory texts that have been written by lawmakers and regulators over the past five years. Dismissing that effort would not make sense, and there is no doubt that the best intentions prevailed through that process.

However, this excruciating analysis should leave us with limited hope. It might be that the size and implications of the next banking crisis of a systemic nature will not threaten global financial stability. I sincerely hope that this will be the case and that progress will have been made in ensuring that financial institutions will not be the source of future instability. I would not be honest if I were not pointing toward a series of issues that need to be further tackled to achieve this ambitious goal:

1. Financial ...