Today, as policymakers seek new paradigms for managing the economy in 2011 and beyond, a better understanding of these linkages will be essential to promoting economic growth and reducing the risk of crises. Equally important is the realization that by working together, we can build a more successful and more stable global economy for the benefit of all countries.Let me spell out what this means for three policy objectives: building a stronger and safer financial sector; achieving more balanced and more stable growth; and managing large and volatile capital flows.
A stronger and safer financial system is the bedrock of a successful economy. This requires strong regulation with a sensible rulebook for financial markets and institutions. And to ensure that everyone plays by the rules, financial institutions must be supervised intensively.
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