ABSTRACT
Over the last several decades, finance has come to play an increasingly prevalent role in most areas of modern life. The global financial crisis (GFC) of 2007–2008 has highlighted the considerable risks to society arising from financial activity as it had evolved over several decades towards the end of the twentieth century and the beginning of the twenty-first century. A flurry of regulatory reform took place in the aftermath of the GFC to give effect to these goals. In particular, many states have introduced macroprudential regulatory reforms to supplement existing microprudential regulation and monetary policy in finance. The informal framework has been designed on the understanding that finance primarily raises a number of co-ordination problems that can be resolved through informal agreement. Perhaps most important is the understanding that globalisation has affected almost all facets of modern life, including finance. This chapter also presents an overview of the key concepts discussed in this book.
