Given that the extraordinary growth of credit and other financial derivatives is still a relatively new phenomenon, and that this has happened in the context of accommodative monetary policies in G3 countries in recent years, it is too early to assess how such markets will work in times of stress and what the overall regulatory approach should then be.
1 At the international level, the Financial Stability Forum (FSF), whose membership consists of central bankers, regulators, and finance ministers from many countries, including the United States, will also soon release a report on the causes of and potential responses to the turmoil.