There has also been increasing recognition of the need for macro-prudential policy in dealing with the problem of systemic risk as well as coordination between monetary policy and financial system policy, given that such measures could likely have a macroeconomic impact. The idea is not new to us as you may recall our prior uses of loan-to-value ratios and tightening of credit card rule to prevent the build-up of vulnerabilities in the real estate and household sectors. Ladies and gentlemen, When all things considered, though regulatory weakness was partly to be blamed for the recent global financial crisis, it is not that the tenet of risk-based supervision is flawed, but rather failures occurred where there was complacency in overestimating the ability to understand and manage such risks. Therefore, I believe one of the key lessons to be drawn from this global crisis is that we must put great focus and vigilance on supervisory process, rather than just redrafting the written regulation. Finally, there is pressing call for stronger international cooperation and dialogue among supervisors. This is so because the complexity and cross-border linkages of financial systems will continue to increase and while we are still grappling with the appropriate supervisory structure to handle cross-border issues, information flows, at this time, continue to be limited. Thus, without effective communication and cooperation, it will be difficult to prevent or contain future financial crisis spillovers effectively.
It is now over a year since the Occupy movement commenced its journey and entered the collective conscience of the public and policymakers. One year on, what has it achieved? Some have suggested rather little, that Occupy’s voice has been loud but vague, long on problems, short on solutions. Others have argued that the fault-lines in the global financial system, which chasmed during the crisis, are essentially unaltered, that reform has failed. I wish to argue tonight that both are wrong – that Occupy’s voice has been both loud and persuasive and that policymakers have listened and are acting in ways which will close those fault-lines. In fact, I want to argue that we are in the early stages of a reformation of finance, a reformation which Occupy has helped stir. Let me start with the contribution of the Occupy movement itself. Occupy has been successful in its efforts to popularise the problems of the global financial system for one very simple reason: they are right. By this I do not just mean right in a moral sense. For sure, Occupy have touched a moral nerve in pointing to growing inequities in the allocation of wealth and incomes globally. The 99% certainly agrees. But so, more interestingly, do a high and rising share of the 1%. Yet it is the analytical, every bit as much as the moral, ground that Occupy has taken. For the hard-headed facts suggest that, at the heart of the global financial crisis, were and are problems of deep and rising inequality.