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Financial Regulation

The 2008 financial crisis revealed major problems in the regulation and management of financial institutions across the world. Some financial institutions were considered ‘too-big-to-fail’, that is, they were so large and influential that their failure would have a disastrous ripple effect on the economy requiring governments to step in and provide support. The collapse or near-collapse of several too-big-to-fail organisations during the financial crisis caused widespread contagion, froze key financial markets and halted global investment flows.

This was a significant shock to the global economy and triggered a global recession with enormous costs to governments, economic growth, employment, and resulted in financial and social hardship for many communities around the world.

Over the past five years, G20 members have agreed, and are implementing, a broad range of policy reforms to promote financial stability and support strong, sustainable and balanced growth. The G20’s financial regulatory reform agenda is coordinated by the Financial Stability Board, which reports to the G20 on its progress in developing and implementing reforms. In 2014, the G20 will focus on four core areas which address the causes of the crisis:

  1. Build resilient financial institutions
  2. End too-big-to-fail
  3. Address shadow banking risks
  4. Make derivatives markets safer.

Given substantial progress to strengthen financial institutions, Finance Ministers and Central Bank Governors agreed in September that the financial regulation agenda should now shift towards implementation of the reforms and ongoing monitoring to identify new risks.

Download the Policy Note Building financial resilience.

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