Changing Perceptions of Systemic Risk in Financial Regulation

After the onset of the financial crisis in 2007, official reports noted that the crisis demonstrated failures of pre-crisis financial regulation. Since the crisis, governments, international organizations and regulators have emphasized systemic risk and financial stability as a core concern of financial regulation. A focus on interconnectedness is a critical component of the analysis of financial stability: financial market activity interconnects across territorial borders, across market sectors and through transactional linkages in ways that pre-crisis financial regulation did not effectively address. The institutional arrangements for transnational financial regulation have also changed: the G20 countries committed to a new co-ordination of financial regulation emphasizing financial stability, an enterprise commentators have characterized as a departure from the pre-crisis paradigm of networks of regulators. Public pronouncements by governments, regulators and international organizations suggest that there has been a transnational paradigm shift in financial regulation. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.