Finance is central to the growth and development of the world economy, and a relatively small number of global systemi-cally important financial institutions (G-SIFIs) are central to finance. But this interdependency is dangerous. The failure of one or more G-SIFIs could disrupt financial markets and put the world economy into a tailspin. Even if such a decline could be arrested, it may take many years before output again reaches its pre-crisis level and many more before it attains levels consistent with the pre-crisis trend of growth rates. Thus, crises can be quite costly, particularly if they permanently scar the economy (see Figure 1.1).1
KeywordsMonetary Policy Central Bank Credit Rating Great Recession Government Debt
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