In a recent speech at the International Banking Summit in Brussels, Klaas Knot, President of De Nederlandsche Bank and Chair of the Financial Stability Board (FSB), emphasized the importance of learning from past crises to prevent future ones.
"Our financial system has to be able to absorb change, to withstand shocks and address vulnerabilities," he said. "In other words: the global financial system has to be resilient."
Knot reflected on the lessons learned from the Global Financial Crisis of 2008 and the subsequent reforms in his speech. "This agenda has proved its worth time and again, helping us navigate many challenging new events," he said. "But there is still plenty of room for improvement."
Knot stressed the need to address the vulnerabilities present in the financial system. In particular, the recent failures of Silicon Valley Bank (SVB) and Credit Suisse have exposed deficiencies in internal controls, risk culture, and governance.
Supervisors and industry leaders must be forward-thinking to anticipate and mitigate risks, Knot argued, highlighting the importance of resilience and adaptability in the financial system and the continuous improvement needed to address the challenges and complexities of the modern world.
"Regulation, supervision and banking should be seen as living things that have to go with the flow and move with the times," Knot concluded. "Our financial system must become more resilient and future-proof. And we must always keep in mind: events are opportunities to learn – to improve is to change."
For more from Klaas Knot, read his Closing Comments from Starling's 2022 Compendium.
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