Six years ago when the financial crisis was in full force, the G7 met here in Washington. We backstopped our entire financial systems.
The G20 then committed to its fundamental reform.
The first objective was to fix the deep and varied fault lines that caused the crisis.
We are now in prospect of substantially completing that job at the Brisbane Summit.
Core financial institutions are more resilient.
Effective bank capital requirements have increased seven-fold. Major banks are on track to meet these requirements five years in advance. And for the first time liquidity standards have been established.
There have been fundamental changes to banks’ relative incentives to engage in proprietary trading, market-making and lending, as well as restrictions on contingent exposures to off balance sheet vehicles, such as SIVs.
Shadow banking is being transformed into resilient market-based financing.
Minimum margin requirements have just been agreed for the repo market, and a variety of shadow banking institutions, including money market funds, have been reformed.
Derivative markets are safer.
Trading is now simpler and more transparent.
Central clearing and trade reporting requirements are coming on-stream, backed up in over half of FSB jurisdictions by capital requirements and, from December 2015, margining requirements.
Half of interest rates swap transactions are now centrally cleared.