Central banks' response to the crisis History taught us that banking crises degenerate into deep and lasting depressions unless they are dealt with quickly and forcefully. Those lessons were not lost on both fiscal and monetary authorities and the policy response worldwide has, indeed, been exceptional by any historical standard. I would like to focus here on three characteristics of central banks interventions •  First, they have been fast and decisive. Indeed, the start of the crisis can be dated back to August 9 2007, when the Eurosystem provided up to 95 billion euros in exceptional liquidity support to the interbank market. As the crisis developed, those interventions multiplied and evolved, a point to which I will return shortly. The deterioration of the real economy and subsequent easing of inflationary pressures opened room for a substantial relaxation of the monetary policy stance. In the euro area, seven reductions in policy rates brought the interest rate on our main refinancing operations from 4.25% in October 2008 to 1% today. •  Second, those interventions have been flexible and highly innovative. Central banks saw as their mission to avoid the paralysis of financial intermediation and keep the monetary transmission mechanisms working efficiently. To achieve those objectives, they considerably expanded and diversified their tools and instruments. In countries where markets play an important role in the allocation of credit, they created numerous new facilities to provide financing and to lower spreads through the purchase of private and public debt securities.
Ong Chong Tee: Review of post-crisis regulatory reforms and initiatives Opening address by Mr Ong Chong Tee, Deputy Managing Director (Financial Supervision) of the Monetary Authority of Singapore, at the ISDA Regulators and Industry Forum, Singapore, 13 November 2017. * * * Mr Christopher Giancarlo, Chairman CFTC, Mr Scott O’Malia, CEO ISDA, Distinguished guests, ladies and gentlemen 1. Allow me to first thank ISDA for inviting my colleagues and I to join you today in this Regulators and Industry Forum, and for me to deliver the opening remarks. LOOKING BACK 2. Let me start with an analogy from the popular children story of The Three Little Pigs and the Big Bad Wolf. I am sure you are all familiar with that – how the Big Bad Wolf ‘huffed and puffed’ and blew down the houses of straw and sticks; except for the one made of bricks. 3. Almost a decade ago, we had a Big Bad Wolf that blew down the house of global finance, triggering the worst financial crisis since the Great Depression. In the post-crisis commentaries and debates that followed, a lot of attention had focused on who was the Big Bad Wolf at that time – was it Lehman together with other investment banks, insurance companies and hedge funds, or was it this product called subprime mortgages? But the more important lesson was that the global financial system was not as robust nor sturdy as previously thought.