New regulatory framework shifts focus to systemic risk in banking sector.
The recent financial crisis changed how banking is regulated. Instead of focusing on individual banks, regulators now look at systemic risk and macroprudential regulation. This means considering the overall stability of the financial system. The shift from microprudential to macroprudential regulation is important for preventing future crises. It involves understanding systemic risk, using tools to regulate the financial system, and coordinating with other economic policies. Challenges remain in finding the best way to regulate the financial system, especially across different countries.