Is the global financial system safer?

Abstract

The fi nancial crisis that erupted in 2007 and is still unfolding prompted a search for reforms that would make the global fi nancial system safer. Several initiatives have emerged. They represent an attempt at addressing fl aws in the system that rendered it v ulnerable to a crisis on the scale we have seen. It is worth asking: what effect have these measures had so far? Perhaps the question is premature because many of the initiatives are in the early stages of implementation and others are yet to be implemented. Still, it is useful to take stock. That would help us understand how urgent the need for reform is and what corrections or additions are required to the reforms undertaken thus far. The International Monetary Fund’s (IMF) Global Financial Stability Report (October 2012) devotes a chapter to such a stocktaking.