Policy-makers around the world have taken bold and timely steps to deal with the financial instability and economic crisis, but it will take time for confidence to be restored and for markets to become fully functional again.
There are important lessons to be learned from this crisis, lessons that should help us to be better prepared the next time a shock occurs – and even reduce the probability of a large shock by limiting the buildup of financial imbalances in the first place. In that spirit, I'd like to talk about the importance of sound risk management for financial system stability.