The Financial System

image of The Financial System

The New Approaches to Economic Challenges (NAEC) initiative was established to distil lessons from the Global Financial Crisis and now the systemic crises sparked by the COVID-19 pandemic. This book publishes short summaries of a diverse range of thinking and proposals from a prestigious series of experts. NAEC invited them to share their expertise with those who wish to learn more about the financial system from those at its heart. They debate the theory and models of the financial system as well as the role of its different component parts, such as currency, insurance or asset management and how they interact. And they offer advice on how financial policy can contribute to making the financial system more resilient.



When I was appointed Secretary-General of the OECD in the summer of 2006, it was a pleasant, if unexciting, time to be an economist. The Great Moderation had already solved the problem of having continuous growth while keeping inflation under control. Deregulation had unleashed the creative energy of the financial system, ensuring that the economy would always have the funds it needed. And the science of economics had finally solved the problem of depressions, according to Nobel laureate Robert Lucas. A year later, that world fell apart. As I write these lines today, in the autumn of 2020, we are facing an even more serious situation, provoked by the Covid-19 virus. It is therefore important to identify significant parallels and differences with the great financial crisis (GFC), and to apply the policy lessons we have learned.


This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error