A study on the new metrics…
by Laura Kodres
Despite a host of reforms in the right direction, the financial structures that were in place before the global crisis have not actually changed that much, and they need to if the global financial system is to become a safer place.
Although the intentions of policymakers are clear and positive, the system remains precarious.
Our new study presents an interim report card on progress toward a safer financial system. Overall, there is still a long way to go.
How we measure progress
In our study, we first tried to pay attention to those features of financial systems related to the crisis—the large dominant, highly interconnected institutions, the heavy role of nonbanks, and the development of complex financial products for instance—features that need to be addressed in some way.
To do this we needed to construct measures of these features in a way that would allow us…
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