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Post Gfc Reforms and Regulations

In: Business and Management

Submitted By dega91
Words 1206
Pages 5
Post Crises reforms and regulations

The global financial crises displayed various weaknesses in the financial system. Ever since the crises, there have been sincere efforts in trying to eliminate or reduce the chances and impact of a future crisis. Four main areas of reform were identified by the international policy makers and sufficient work has been done to implement them (The Regulatory Response to the Global Financial Crises, 2014). Although Australia has not been affected as much as the north Atlantic countries, it still operates in the global environment. A part of regulatory reforms includes managing and monitoring systemic risk. Australia has been trying to do that through various entities such as the RBA, APRA and ASIC. Australia has also implemented reforms related to derivative trading, which are being traded more and more despite their high level of risk. Even though the reforms and regulations that were and going to be implemented, improved the safety of the financial system, there will never be a one hundred percent guarantee that there will be no future crisis. The G20 summit in 2008 was different from the prior summits in that it constituted of the leaders of the countries instead of Finance Ministers and Bank Governors (RBA, 2012). The leaders agreed on four areas of reforms which are: Strengthening Prudential Regulatory Standards (Basel III), addressing too big to fail institutions, reforms to OTC derivatives market and shadow banking. The entities that are mainly in charge of implementing those reforms are the Financial Stability Board (FSB), Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) (Davis, Regulatory Responses to the Financial Sector Crises , 2010). Basel III was developed by the BCBS, and it was aimed towards strengthening the supervision, regulation and risk…...

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