But the reviews did surface areas for improvement. They identified specific areas – like trade finance, infrastructure finance, SME finance and market liquidity – where the cumulative effects of various reforms had led to sub-optimal social outcomes. This led the way to carefully calibrated adjustments to regulations that eased the constraints in these areas without significantly increasing risk. The responsiveness and flexibility shown by regulators helped to sustain the broad-based political and industry consensus in favour of the post-crisis reforms. Today, looking back from the vantage point of 2028, we can say with greater certainty that the post-crisis reforms have left us a financial system that is, on the whole, more robust and more resilient. 2/9  BIS central bankers' speeches  Large banks are now stronger, more liquid, and less leveraged. Derivatives markets are safer and better collateralised. The era of enhanced supervision (2021 onwards) The third phase began from around the early 2020s, when the focus shifted away from rulemaking to enhancing the supervision of financial institutions. The Global Financial Crisis was not just about gaps in regulation, it was also about gaps in risk management and supervisory oversight. Three developments in recent years added new impetus to the supervision agenda. First, as the international activities of global banks increased and became more complex, regulators realised that effective supervision increasingly required much stronger cross-border co-operation and even co-ordination.

And the integration of RegTech and SupTech allowed data from financial institutions to flow directly into regulators’ data bases in machine-readable formats through Application Programming Interfaces or APIs. Supervisory officers, who used to spend long hours poring over spreadsheets and reports – cutting, pasting, and computing – began to use automated surveillance dash boards. They are able to track on a daily basis the consolidated exposures, credit quality, value-atrisk and other indicators of the banks under their purview. They are able to carry out stress tests and simulations not only of individual banks but also network analysis of risk transference across the financial system. 3/9  BIS central bankers' speeches  Compared to just ten years ago, technology has enabled supervision to become much sharper and surveillance of systemic stability more rigorous. Managing the Risks Posed by FinTech while Harnessing its Benefits The second big theme in financial regulation over the last 20 years is the rise of FinTech. Technology has always featured in financial services. But from about 2015 onwards, there was an explosion in the application of various technologies in financial services – by both regulated entities and unregulated FinTech firms offering niche financial products. FinTech transformed the way financial services were produced, distributed, and consumed. It has brought significant benefits to consumers, financial institutions, and the economy at large. It has helped to reduce costs, manage risks better, create new business opportunities, and improve people’s lives. But like all good things, FinTech brought in its wake new risks and new challenges for regulators.