Minimising the impact of future fi nancial crises: six key elements of regulatory reform we have to get right.

Abstract

To be as prepared as possible for the next financial crisis, we should not embark on a long list of detailed proposals that we believe might have prevented the last one. Instead, we should strengthen existing regulatory frameworks to take into account their fundamental shortcomings highlighted by the recent crisis. This improvement should focus on the essentials and be based on a few simple principles so as to be robust against unforeseen events. We have to get these key elements right to ensure that the next episode of stress in financial markets is less disruptive and costly than the current one.