The volatility in financial markets in the first week of 2016, influenced to a large extent by ongoing concerns about Chinese growth and uncertainties about the policy response of authorities, served as a reminder that many investors remain very nervous about the road ahead. Then there is the issue of geopolitical risks, which unfortunately have also shown signs of escalating of late.
We need to make our financial institutions more resilient and re-establish a sense of values, in particular a strong sense of responsibility vis-à-vis the real economy. To achieve this, legislators and regulators may have to introduce a new set of incentives for those operating in the financial sector. This is one of the lessons that we have learned from the financial crisis.