Christian Noyer: "Regulating fi nance after the crisis" VI Banque de France • Financial Stability Review • No. 13 -The future of fi nancial regulation • September 2009The crisis is a reminder that, after an expansion phase, an event that is not of unusual size or duration, e.g. the rise in delinquencies on US subprime loans, can trigger a sharp fi nancial reaction.One reason for this is that structural characteristics of fi nancial systems change during periods of prolonged expansion.As these changes cumulate, "the domain of stability of the system" 10 decreases.Regulating an evolving fi nancial system is challenging.To be successful, the fi nancial regulation that will emerge after this crisis should achieve three objectives.It should set the incentives right for private fi nancial intermediaries as well as for public authorities.It should be broad and fl exible enough to encompass all sources of risks and regulated them "as appropriate" .11 And above all, it should adopt a system-wide approach to fi nancial stability that means the necessity to complement the micro approach by a macro perspective that may include specifi c treatment for specifi c entities.10 Minsky (1982).11 G20 (2009).
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