When this was made evident in the US market for sub-prime mortgages in 2007, it led to a market-wide reassessment of financial risks and the collapse in the market values of credit instruments. This, in turn, affected negatively the net worth and profitability of banks which held such assets in their portfolios.
Moreover, there was a distinct perception of a lack of an effective mechanism to influence macroeconomic and structural policies in key countries where those appeared unsustainable from the standpoint of global economic and financial stability. The global public good of international financial stability was, and remains, under-supplied. This is an area where bold and ambitious reform was and is needed. 3.