© 2010 International Monetary Fund WP/
IMF Working Paper
Lessons and Policy Implications from the Global Financial CrisisPrepared by Stijn Claessens, Giovanni Dell’Ariccia, Deniz Igan, and Luc Laeven
This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily representthose of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
Paper presented at the 50
Panel Meeting of Economic Policy, Tilburg, October 23-24, 209. This paper draws onwork (some joint) of a number of colleagues at the IMF, including notably Olivier Blanchard and KrishnaSrinivasan, as well as Tam Bayoumi, Ranjit Teja, Laura Kodres, David Marston, Ana Carvajal, Randall Dodd,Michael Moore, Erlend Nier, Ian Tower, Luisa Zanforlin, Barry Johnston, Effie Psalida, Phil de Imus, JeanneGobat, Mangal Goswami, Christian Mulder, Francisco Vazquez, Jochen Andritzky, John Kiff, Pamela Madrid,Andrea Maechler, Aditya Narain, Noel Sacasa, Jodi Scarlata, Kenichi Ueda, Augustin Landier, Isabelle Mateos yLago, Luis Cortavarria, Simon Gray, Mahmood Pradhan, Ian Tower, Rupa Duttagupta, Rishi Goyal, and GianMaria Milesi-Ferretti. We like to thank Sylvester Eijffinger and other participants of the Panel for their commentsand Zeynep Elif Aksoy and Jeanne Verrier for help with the data, and David Fritz for comments. The viewsexpressed do not necessarily represent those of the IMF or IMF policy. We refer to the IMF paper, 2009a,
Initial Lessons of the Crisis
, for a summary of Fund’s views.
The ongoing global financial crisis is rooted in a combination of factors common to previousfinancial crises and some new factors. The crisis has brought to light a number of deficienciesin financial regulation and architecture, particularly in the treatment of systemically importantfinancial institutions, the assessments of systemic risks and vulnerabilities, and the resolutionof financial institutions. The global nature of the financial crisis has made clear thatfinancially integrated markets, while offering many benefits, can also pose significant risks,with large real economic consequences. Deep reforms are therefore needed to the internationalfinancial architecture to safeguard the stability of an increasingly financially integrated world.JEL Classification Numbers: E02; E42; G01; G15; G18; G21: G24: F30; F34; F42Keywords:Author’s E-mailAddress:International financial architecture, regulation and supervision, financialcrises, subprime lending, contagion, households leverageSClaessens@imf.org; GDellariccia@imf.org; DIgan@imf.org;