Managing the Next Financial Crisis: An Assessment of Emergency Arrangements in the Major Economies
Author(s): G30 Working Group
This study examines the emergency mechanisms and authorities available across the major economies to help manage future financial crises. The study asks whether changes to the mechanisms and authorities made since the 2007-08 global financial crisis have made the major economies safer and more able to address future crises.
The extensive post-crisis reforms, including substantially more conservative capital and liquidity regulations, will help create more stable and resilient financial systems in the major economies. The reforms also provide promising new tools for resolution and restructuring. However, the study identifies serious challenges that remain. The new prudential safeguards have not been fully implemented. They are also not comprehensive in scope, focusing primarily on the traditional banking sector and less on the range of other financial institutions and sources of credit that are so important in many financial systems, and that were such critical points of weakness in the last crisis. Further, some central banks have a diminished ability to respond swiftyly and effectively to a financial crisis of systemic nature.