Financial Stability in the Aftermath of the World Crisis – Looking for a New Framework

Effects of the worst crisis since the Great Depression are still being felt throughout the world. While emerging economies have found their way out, due to sound economic fundamentals, developed economies are still struggling. The crisis unfortunately proved the damages caused to real economy by a non-regulated global, interconnected financial system. This article aims assessing the performance of recent regulation measures and provides additional regulation paths enabling financial stability. The first section briefly summarizes the factors having allowed the development of the current financial and economic crisis. The second section analyses the links between financial markets and real economy, both in developing countries and in advanced economies. The third section addresses the necessity to regulate the financial system. The forth section assesses the effectiveness of existing regulation policies, particularly the Basel III Recommendations and the Dodd-Frank Act, in the US. The fifth section proposes different regulation solutions and concludes.