In autumn 2008, the international financial system was on the brink of the abyss, with volatility and risk indicators at extreme levels. One year later, the system's crisis has been overcome thanks to massive injections of liquidity, interest rates close to zero and generous financial aid programs for the banking sector. At the same time, and thanks to fiscal stimulus programs, the financial system crisis has been prevented from turning into a new episode of great depression, and has simply remained a great recession. The critical phase of the financial crisis has been overcome, and the stock markets have partially recovered, but the problems of bank solvency are still there, despite the improvement in profitability indicators. The improved economic outlook will not be consolidated until the balance sheets of banks, starting with those in the United States, are cleared of impaired assets.

A bank with balance sheet problems is a drag on economic growth because it cannot provide the necessary credit to Economics. The idea that a vigorous economic recovery fueled by low interest rates will clean up bank balance sheets on its own is attractive, and comfortable, but dangerous. The example of Japan is clear. The consequences of the bursting of its bubble without subsequent bank clean-up are still being paid for now, with more than a decade of stagnation. It is therefore urgent to clean up the bank balance sheet in order to restore the normal functioning of the financial system and avoid a false start to the crisis.

In November 2008, in these same pages, I set out three tasks in relation to the crisis. The first task was to take coordinated measures to avoid a major depression. This has been done, albeit with the shadow of the banking sector cleanup.

The second task was how to mitigate the pernicious consequences of aid to the banking sector. Indeed, the generalized financial aid to troubled institutions means that excessive risk-taking is not punished and, consequently, the seeds are sown for irresponsible behavior in the future. Moreover, institutions that have been prudent are not rewarded and may even find themselves at a disadvantage, with a higher cost of capital because they do not benefit from public subsidy. Here, the results have been mixed. While the European Commission has insisted that subsidized institutions restructure and downsize by selling assets, as in the cases of Royal Bank of Scotland or ING, the US authorities have not acted in parallel with Citigroup or Bank of America. In any case, the feeling that an institution can take too much risk, be saved because it is "too big to fail", and then the taxpayer pays the price, is there for the future. Not a good example.

The third task proposal was to reform the financial system to make it more robust and avoid a new general crisis. Little progress has been made in this regard and there is a danger that the lessons of the crisis have not been learned.

The Financial Stability Board ( committee ) proposed by the G-20 has determined some principles to reform the system: strengthen capital requirements -including countercyclical provisions, in which the Bank of Spain has been a pioneer-; introduce liquidity requirements with special attention to international operations; reduce systemic risk induced by the behavior of "too big to fail" institutions; strengthen and homogenize accounting standards; improve remuneration methods for employees of financial institutions to control incentives to take risk; extend supervisory control to all entities acting as banks; raise risk control standards for over-the-counter derivatives markets; revitalize asset securitization in a context of greater transparency, less complexity and alignment of incentives between investors and issuers; and, finally, ensure international consistency of regulation and supervision. These principles should inspire the regulatory reform and prudential rules dictated by the Basel committee .

In the European Union, as a result of the Larosière report , the creation of a European system of financial supervisors in the areas of banking, insurance and markets has been promoted to increase coordination in the supervision of institutions and markets. committee On the other hand, the creation of a European Systemic Risk Board (ESRB) has been proposed to advise and prevent this subject and in which the European Central Bank (ECB) is called upon to play an important role. This is a still timid step towards further integration of financial supervision in the EU. However, the EU still lacks a clear line of authority in cases of systemic crises. The proposed ESRC will have no operational capacity and it is not clear that the ECB has the necessary supervisory information on individual institutions.

In addition, the problem of resolving the failure of cross-border institutions, with the case of Fortis as an example, remains. This problem would be alleviated by requiring pan-European institutions to take out deposit insurance and setting up a European guarantee fund. At the same time, the trend is towards stricter regulation of hedge fund and private equity managers. This regulation is in danger of being regulatory and ineffective. Some countries have instituted limits on the remuneration of bank executives, and the United Kingdom has introduced a temporary windfall tax on bonuses received, to which the City has reacted with displeasure. The idea of the windfall tax is that the recent profits made by the banks are due to the aid received rather than to the management made.

In the United States, the architecture of financial regulation is discussion . The congress proposes a preponderant role of the reservation Federal in the management of crises, a committee of systemic risk, and the creation of a consumer protection agency. The Senate is considering a proposal to create a super-regulator that would take supervisory powers away from the reservation Federal, which would take a back seat between the regulator and the committee systemic risk. There is even speculation that the central bank may not act as the system's lender of last resort written request in order to preserve its independence. The battle promises to be tough as the reservation Federal, and Ben Bernanke in particular, are under fire for their role prior to the outbreak of the crisis and their reaction to it. Chairman Bernanke has recently argued, to the surprise of many, that the policy of low interest rates before the crisis is not manager of the housing bubble, but inadequate regulation. From agreement with the pre-crisis orthodoxy, a central bank cannot and should not do anything to prevent the training of real or financial asset bubbles. The so-called "Greenspan option", from agreement whereby asset price disinflation is combated by lowering interest rates, seems more alive than ever. In fact, the current spectacular recovery of the stock market is not unrelated to the current interest rate policy.

The outlook is therefore complex, and both financial regulation and the configuration of its architecture are up in the air. There is consensus on the general points of the Financial Stability committee but not on the details. Also at stake is the role of central banks in preserving the stability of the financial system. The result of discussion in the US will have international repercussions. Substantive regulatory reform cannot be left in the dust, with essentially cosmetic changes that reflect a "business as usual" attitude. If this were the case, the crisis would have been a lost opportunity to build a more robust financial system and we could only expect new episodes in which we would once again approach the abyss.