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Global Financial Stability Report 2018

Global Financial Stability Report 2018

Ten years since the failure of Lehman Brothers the global economy continues to grow and progress toward a safer global financial system is undeniable. New supervisory and regulatory standards, tools, and practices have been developed and implemented across the globe. Banks are now stronger because the quality and quantity of capital has increased steadily, and minimum liquidity standards have been phased in around the world. Supervisory stress testing has been broadly adopted, and many jurisdictions now have macroprudential frameworks and policy tools with which to address systemic risks. Many shadow-banking activities that contributed to the global financial crisis have been curtailed or transformed into safer market-based finance. So, looking back, a new financial architecture has been put in place, a testament to the resolve of policymakers to work together internationally to avoid a repeat of the Great Depression. But is the financial system safe enough? Looking ahead, clouds appear on the horizon.