At the same time, it is important to identify risks in the financial system as a whole in a cross-sectoral manner. These are indeed very extensive and difficult issues, and central banks and supervisory authorities around the world have been deliberating on how to improve financial regulation and supervision by making use of the lessons learned from the U.S. subprime mortgage problem. 3.
Other institutions are de-emphasizing high-profile but risky capital markets businesses that benefited employees more than shareholders and society. As the reform process progresses, we can expect further adjustments that should ultimately lead to a more resilient, diversified sector with a more sustainable risk-return profile.