posed enormous economic costs. it is consequently vital that authorities diagnose the current problems thoroughly and take bold and radical action to remedy the current deficiencies. the need to strengthen the resilience and robustness of the global financial system is clear and paramount. there is a major work programme ahead for international regulatory bodies, for national authorities, for the imf and for the financial stability board itself. in many areas, such as the “ too big to fail ” problem, there will be no easy answers. in others, such as introducing a macro - prudential or systemic approach to financial regulation, both academic and policy thinking is still at an early stage. and as the situation improves, the power of vested interests contrary to any substantive reform gets stronger. nevertheless, we must take action in the near term in all areas. can we prevent the next crisis? almost by definition of the word “ crisis ” the response to this question is bound to be negative, but what we can and should do is to make our financial system more resilient when the next crisis will hit it. after all we have shown that we are able to learn from experience. this crisis had all the potential to generate the same devastation as in 1929, but this time both the structure of the real economies was more robust, and the policy reaction was more perceptive and eventually successful.

of the financial system as a system, that gaps in the regulatory agenda are identified and filled, and that overlaps and inconsistencies are avoided. second, as i will illustrate further below, many financial stability policy goals, such as resolving the “ too big to fail ” problem, span a wide range of issues that require input, expertise and action from a number of standard setting bodies and national and international agencies. the board will oversee these multi - dimensional work programmes, to balance the potential solutions from individual work streams, and to offer consistent advice to political leaders on how to develop a strong policy framework. and third, the board will promote consistent implementation and follow through of agreed policies and standards. 3. developing financial stability policies a key responsibility – and a starting point for much of the fsb ’ s work – is to identify sources of vulnerability in the global financial system and how best to reduce them. there are conjunctural as well as structural components to this assessment and, as this crisis has amply demonstrated, these components interact. while we regularly review trends in global financial system to identify areas where risks may be building, our primary focus is the identification of structural weaknesses : market failures, such as the misalignment of incentives, collective action and coordination problems ; weaknesses in market infrastructure ; and information asymmetries and shortfalls. such “ fault - lines ” in the fabric of the financial system highlight the need for regulation and supervision. it is vital that the authorities work closely together to deliver common and consistent solutions to identified system - wide vulnerabilities, given the potential for arbitrage and regulatory competition and the risks of conflicts between uncoordinated national policy objectives. a collective diagnosis is the necessary foundation for a well coordinated and effective response. following the onset of the financial crisis, an urgent and immediate task of the fsb ’ s predecessor, the financial stability forum, was to undertake a thorough assessment of the main sources of the crisis, the weaknesses revealed and lessons for policy. in april 2008, the fsf produced a report committing its members to a wide range of concrete actions to strengthen financial system resilience. a further set of recommendations, focusing on ways to reduce the procyclicality of the financial system, to improve co - operation in cross - border crisis management, and to strengthen compensation frameworks, was published in april 2009. together, our 2008 and 2009 reports were major inputs into the declarations by leaders at the washington and