A Decade After the Global Financial Crisis: New Regulatory Challenges to Financial Stability

Since the global financial crisis in 2008 regulatory measures have been taken to strengthen the international financial sector. There are however regulatory challenges that have the potential to destabilise the international financial sector. This article examines three of these challenges: Fintech, Brexit, and Emerging Markets Economies. There is currently no significant analysis of these issues in relation to their effect on global financial stability. This article addresses this gap and analyses why these issues form a threat to financial stability. Fintech is modest but growing exponentially and there is little regulation in place, Brexit is characterised by prolonged uncertainty and potentially significant negative effects on the economy, and Emerging Markets Economies now occupy a far larger part of the international financial sector than in 2008 and their potential effects on global financial stability are also significantly stronger. The analysis leads to the conclusion that the common threat emerging from these challenges is policy uncertainty which leads to increased wariness from investors, which in turn leads to sudden changes in capital flows. This can potentially affect international financial stability. To mitigate these effects a more internationally harmonised approach to policy and regulation is key.