Post by Bank for International Settlements – BIS

Nearly 20 years since the start of the Great Financial Crisis, Pablo Hernández de Cos took stock of the financial sector reforms which have reshaped the global prudential framework over the last two decades and underpinned resilience. In a lecture at the International Center for Monetary and Banking Studies in Geneva, he said policymakers should remain open to reviewing regulatory frameworks, working with open minds, taking a holistic approach and starting with the recognition that financial stability is a global public good that calls for cross-border cooperation. Reviews should be framed around three questions: 1. Have the post-GFC financial reforms enhanced resilience, and have they resulted in any side effects? 2. Can we improve efficiency and reduce complexity while preserving resilience? 3. Does the regulatory framework adequately capture emerging risks? Mr Hernández de Cos said financial reforms have considerably strengthened resilience without undermining credit provision. Yet more work is needed to streamline the regulatory framework, while preserving that resilience. Regulation should also evolve alongside the financial system, addressing emerging risks such as those posed by non-bank financial intermediation and digitalisation. He called for continued international cooperation to ensure financial stability, highlighting the BIS’s role in fostering dialogue and capacity-building across jurisdictions. Read the full speech at: https://bit.ly/4spAepz