Redesigning the Contours of the Future Financial System [electronic resource] Kodres, Laura E..

Kodres, Laura E.
Washington, D.C. : International Monetary Fund, 2010.
IMF eLibrary
IMF Staff Position Notes; Staff Position Note No. 2010/10.
IMF Staff Position Notes; Staff Position Note No. 2010/10
Government document
1 online resource (18 p.)
Local subjects:
Bank supervision. (search)
Banks. (search)
Brokerage. (search)
Corporate bonds. (search)
Credit derivatives. (search)
Crises. (search)
Domestic financial system. (search)
Financial cycles. (search)
Financial flows. (search)
Financial innovation. (search)
Financial institutions. (search)
Financial instruments. (search)
Financial intermediaries. (search)
Financial markets. (search)
Financial regulation. (search)
Financial regulations. (search)
Financial resources. (search)
Financial services. (search)
Financial stability. (search)
Financial structure. (search)
Financial system. (search)
Financial systems. (search)
Fiscal cost. (search)
Fund role. (search)
Global Financial Crisis -- 2008-2009. (search)
Government Policy and Regulation. (search)
Hedge. (search)
Hedge funds. (search)
Incentive structures. (search)
Information gaps. (search)
Information sharing. (search)
International financial community. (search)
International Financial Markets. (search)
Investment Banking. (search)
Lack of competition. (search)
Liquidity support. (search)
Money market. (search)
Money market funds. (search)
Moral hazard. (search)
Multilateral surveillance. (search)
Nonbank financial sector. (search)
Nonbanks. (search)
Reform agenda. (search)
Reform efforts. (search)
Regulation. (search)
Risk management. (search)
Venture Capital. (search)
Brazil. (search)
Germany. (search)
Grenada. (search)
India. (search)
Saint Lucia. (search)
Switzerland. (search)
United Kingdom. (search)
United States. (search)
This paper explores the private- and public-sector responses to the crisis and some of the probable outcomes. Aside from improved supervision of individual institutions, greater emphasis needs to be put on financial regulations that reflect the systemic nature of financial risks and the role that macroeconomic policies play. Global consistency of regulation and financial sector taxation will be essential to mitigate systemic risks, avoid unintended distortions, and help ensure a level playing field. This note suggests the key aspects of the future contours will likely be: ? Banks are expected to return to their more traditional function as stricter regulation will limit the risks and activities they can undertake. ? The nonbanking sector will likely have a greater competitive advantage—both in supplying credit and providing investors with nonbank services—and will thus grow. ? The perimeter of regulation will need to expand to take into account risks in the nonbank sector. ? Market infrastructure will be reinforced to protect investors and will need to provide simplicity and transparency to make risks clearer and the financial system safer. ? The global financial system is likely to be smaller and less levered than in the recent past, and could well be less innovative and dynamic, at least for a while.
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Kodres, Laura E.
Narain, Aditya.
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