There are two important points in this regard. First, it is important to ensure that financial intermediaries in emerging and developing economies are not disadvantaged in the new regulatory framework, especially since the opportunities and challenges in their systems are quite different. Second, the more demanding regulatory standards should not lead to deleveraging by global financial institutions out of emerging markets.
It should be noted in this regard that the financial regulatory reform has so far focused on reducing systemic risks, and rightly so, but not much attention has been devoted to redirecting savings from investment in volatile financial assets to financing investment in the real economy, where the impact on growth and jobs is more tangible and direct.