So far, one pillar that has received substantial public attention is regulatory reform, where there have already been some notable achievements, including agreement on the new Basel III capital and liquidity standards. However, the process of regulatory reforms that is proceeding across various jurisdictions has come to pose new challenges especially as the global economy continues to be marked by new risks.
The uncertain and uneven recovery has led to calls in some quarters to dilute or slow the financial reform initiatives. While there may be a case for some back loading of difficult adjustments to strengthen the recovery of the financial sector, any weakness in our resolve or commitment to reform will sow the seeds for a fresh crisis down the line.