26th June 2025
Opening statement by the editors
The aftermath of the Global Financial Crisis (GFC) – which made so lively in our memories how devastating the costs of financial instability can be – was marked by an intense and successful global reform on financial regulation and supervision. Financial reforms over the last 15 years made financial institutions much more resilient and have been decisive to restore trust in market mechanisms and institutions.
New episodes of instability, such as the UK Liability-Driven Investment Crisis and the spring 2023 turmoil, affecting some US regional banks and Credit Suisse, a global systemically relevant institution, opened a new debate: some argued for a new turn on the screw, introducing additional and tougher rules to overcome a perceived miscalibration of regulatory requirements; other shifted their focus on the need to expand the scope of regulation beyond banks, to better mitigate risks to financial stability; but also different voices were raised arguing that the reforms were having unwarranted adverse effects on growth and were not correctly focused, thus arguing for deregulation.
An unprecedented combination of unusually high uncertainty arising from geopolitical developments and a set of ongoing global structural trends – ageing, financial innovation, artificial intelligence, climate transition – creates new risks and challenges for financial supervision and systemic stability. As the IMF’s Global Financial Stability Report just reminded us, advanced economies face a threatening combination of prospective financial vulnerabilities: stretched valuation of stocks and corporate bonds, highly leveraged non-banking institutions which are increasingly connected with banks, and challenges to public debt sustainability for highly indebted sovereigns. How can financial supervisors best navigate this rapidly shifting risk environment?
The Forum on Financial Supervision takes the challenge to promote the exchange of knowledge from senior policy makers, academics and other financial leaders to address prominent financial supervision issues, taking a comprehensive view on financial stability, both in what concerns the financial sector and the available policy tools. There are two essential pillars:
(i) exhaustive coverage of all the segments of the financial sector (banks, (re)insurance firms, pension funds, investment funds, securities markets and unregulated financial institutions);
(ii) exhaustive coverage of all the public functions that constitute the safeguard of financial stability (microprudential, macroprudential, conduct, anti-money laundering, crisis management and resolution, guarantee schemes, financial literacy).
The Forum on Financial Supervision will host general contributions, focused on any topic that the contributors find relevant for the agenda of supervisory authorities, and specific contributions on topics that the editors will identify as suitable for an in-depth technical debate. For the coming year, the three topics will be
(i) the way-forward for stress testing in a moment in which – after gaining a compelling relevance during the GFC and, since then, playing a prominent role in the assessment of capital levels in the banking sector – the benefits of repeating the current stress testing exercises seem to be declining.
(ii) the need to address the risks emerging from the non-banking sector, which expanded considerably since the GFC (reaching about half of the assets of the global financial system), became increasingly interconnected with the banking sector, and it still remains to some extent outside the purview of supervisory authorities.
(iii) the risks emerging from real estate markets, in a moment in which housing prices have reached all-time highs in most geographies and commercial real estate has been flagged as a leading financial risk in some jurisdictions.
With the Forum on Financial Supervision we hope to foster a rich and open dialogue on essential aspects of financial supervision and systemic stability and, even more so, to come out with effective contributions for policy-making. As editors, we thank the Systemic Risk Centre (London School of Economics) for hosting the Forum and welcome all the contributions that could help us in achieving this.
Andrea Enria is a Senior Advisor at the Prudential Regulation Authority and a Member of the Prudential Regulation Committee of the Bank of England, with a term of appointment from 20 March 2025 to 19 March 2028. He was a visiting scholar at the London School of Economics’ Financial Market Group from May 2024 to April 2025. He previously had key roles in European banking supervision: he served as Chair of the Supervisory Board of the European Central Bank (2019-2023), first Chairperson of the European Banking Authority (2011-2018) and Secretary General of the Committee of European Banking Supervisors (2004-2008). He began his career in banking regulation and supervision at Banca d’Italia, where he covered different roles and left as Head of the Regulation and Macroprudential Analysis Department. He has a BA in Economics from Bocconi University and a MA in Economics from the University of Cambridge.
Pedro Duarte Neves is Adviser for the Board of Directors of Banco de Portugal and editor of the Review of Economic Studies of the Bank. He is a Visiting Professor at Católica Lisbon School of Business and Economics, Associate at the SRC (LSE) – where he is also Editor of the Forum on Financial Supervision – Affiliated Fellow with the Qatar Centre for Global Banking and Finance (KCL), and a member of the Advisory Board of the EBI. He was Vice-Governor of Banco de Portugal, Alternate Chairperson of the EBA, and chair of a number of committees in the scope of the FSB, EBA, and the Joint Committee of the ESAs. He has a vast experience at the main high-level supervisory and regulatory fora, like the EBA, SSM, ESRB, Joint Committee of the ESAs, and FSB. Pedro Duarte Neves published in scientific journals like The Journal of Econometrics, Economics Letters and Economic Modelling. His research interests include banking supervision and regulation, macro-prudential policy, and the real economy.
