This article considers the lessons from the global financial crisis for redesigning the financial system and its regulation
to make the chance of such future crises lower. It focuses on three areas: improvements to the regulation of individual financial
firms; macroprudential analysis and improving the structure of crisis resolution and management. It argues that if the authorities
implement a credible crisis management regime where no firm is too big to be resolved, a smarter and more incentive-based
approach to the regulation of individual financial firms and extensive macroprudential analysis that both makes the structure
of financial markets less risky and identifies risks, the risk of future crises will be reduced. But no framework can eliminate
the risk altogether.
