A striking feature of the crisis is the synchronised manner in which shocks have been transmitted across market segments and countries. And the key lesson of the crisis is that keeping an economy in order does not necessarily insulate it from external shocks. An excessive focus on the domestic economy may exacerbate global economic and financial imbalances, ultimately making future global crises more likely and more severe. The key challenge faced by global policy-makers is to make the system safer and avert future crises. A new paradigm for international cooperation is thus required from global policy-makers – one in which long-term objectives, such as sustainable growth, are fully internalised. The speech also highlights the importance of peer-reviewed mechanisms and strong surveillance in this context.
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