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Global Systemic Risk Regulation since the Financial Crisis

A framework for understanding the effectiveness, impacts, and harmonisation of macroprudential regulation


The financial crisis of 2008-2009 sparked massive global legislative and regulatory responses to address perceived market and regulatory failures responsible for setting the crisis in motion. Few corners of the financial sector have been left unaffected by these regulatory efforts.

Strengthening both the oversight of individual institutions (microprudential supervision) and the entire financial system (macroprudential supervision) are major objectives of global regulatory reform efforts.

The challenge for policymakers and practitioners in light of the magnitude of financial regulatory efforts is to: (1) understand the effectiveness of specific regulations balanced against the need to maximise long-term social welfare and firm value; (2) understand the collective impact of regulation on firms and financial markets; and (3) assess the need for and the degree of harmonisation of regulatory efforts globally.

This study makes an important contribution to the ongoing regulatory discussion by providing a framework for policymakers and practitioners to assess the effectiveness of these regulatory efforts and the potential for harmonisation of reforms across various jurisdictions. In this regard, the value of this work lies in the concepts and themes that attempt to bring greater clarity to the vast amount of financial regulation established since the financial crisis.

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