support the recovery while preserving financial stability. the second document we discussed is the final report on the effects of too - big - to - fail reforms, which updates the interim analysis, also in light of the experience of the pandemic. the key message, on which we concurred, remains that the ‘ too - big - to - fail ’ reforms for banks are working as intended, reducing moral hazard and systemic risk with no material side effects. we agreed to work on filling some remaining gaps, concerning the information available to public authorities for financial stability risk monitoring and some residual obstacles to resolvability. we also concurred on the need for a system - wide approach to monitor risks that have moved 1 / 2 bis central bankers'speeches outside the banking system. we are therefore committed to strengthening the resilience of nonbank financial intermediation, building upon the fsb ’ s ‘ holistic review ’ of the march 2020 turmoil and on the further work that the fsb will conduct under the italian g20 presidency and beyond. we are now ready to take your questions. 2 / 2 bis central bankers'speeches

, increasing the flexibility of exchange rates was a key policy recommendation. despite the considerable attention paid to these issues, limited progress was made in actually implementing this agenda or in reducing global imbalances. as is well known, the crisis did not follow this script. in the event, the dollar weakened in the years leading up to the onset of the crisis in 2007, but once the crisis deepened, the dollar was pushed up sharply by safe - haven flows as investors sought refuge in u. s. treasury securities from dysfunctional markets and stressed institutions around the world. adding to upward pressures on the dollar was a severe dollar funding shortage that arose because global banks had been funding long - term asset positions with short - term dollar borrowing in wholesale markets, resulting in a significant funding crunch when these markets froze up. instead, the main causes of the crisis originated in the financial sector and stemmed from a widespread underappreciation and underpricing of risk. failures of risk - management systems, incentive problems in securitization and compensation structures, and regulatory shortcomings and gaps led to a vulnerable, overleveraged financial system with inadequate capital and liquidity buffers. these problems were amplified by the eagerness of u. s. households to take on huge amounts of mortgage debt and of lenders to advance them the credit, justified by overly optimistic expectations for house price appreciation as the real estate boom progressed. but these financial sector problems were enabled, if not encouraged, by developments in the global economy. the capital outflows associated with the persistent current account surpluses were large even in net terms and, combined with relatively restrained business capital spending in many advanced economies ( including the united states ), put downward pressure on real interest rates globally. 4 from a purely theoretical perspective, there is no compelling reason to believe that low real interest rates, by themselves, pose a particular risk to global economic and financial stability, as real interest rates should be driven by underlying forces to balance the global demand for saving and investment. capital inflows from abroad can be beneficial if they are invested the leading example of these policy discussions was the international monetary fund ’ s multilateral consultation on global imbalances. participants included china, the euro area, japan, saudi arabia, and the united states. this outcome is commonly referred to as the “ global saving glut ”. see ben s. bernanke ( 2005 ), “ the global saving glut and the u. s. current account deficit