Subsequently, including at the following summit in Pittsburgh, world leaders agreed that the supervision of individual financial institutions had to account for the financial system as a whole, and it was recognized that shocks could originate from within the system and could spread to institutions with common exposures.
In other words, the supervisory framework had to be macroprudential—focusing on mitigating systemic risk and accounting for macroeconomic consequences. 3 This reorientation was a defining part of the 2010 Dodd-Frank Act, and internationally, in the Basel III Accord.