The global financial crisis has been a watershed for the global economy. Its implications for growth, distribution, and public finances have been severe. Structural changes have affected both the real economy and the financial sector. Reforms of the financial regulatory system have not only been a consequence, but also a driver of these trends.
The G20 countries undertook an internationally coordinated overhaul of the financial regulatory landscape. It has been the broad objective of these reforms to reduce the probability and impact of future financial crises. The crisis has particularly challenged the perception that the stability of individual institutions automatically guarantees the stability of the entire financial system. Macroprudential now complements microprudential supervision.