The Quest for the Stability of the Global Financial System

The global financial crisis has taught the economies all over the world serious lessons. The aim is to assure a similarly tough crisis would not occur again. The paper focuses on the question whether stricter financial regulations are needed and how the global financial system can be reformed to become more resistant to shocks. Strengthening the financial regulation and the issue of financial stability have become a key public policy issue for economies with a significant role in reaching agreements between countries toward this direction. It is the G-20 economies and the IMF that are committed to maintaining financial stability and the transparency of the financial sector, which is likely to remain the source of economic crises. Nevertheless the trade-off between safety and economic growth has to be taken into account. This paper examines what has been achieved in the field of implementing regulatory reform steps and whether they provide protection to consumers and taxpayers as well as the preparedness of financial institutions when it comes to facing potential shocks.