The need for stronger surveillance and better foresight in financial governance was made clear during the global financial crisis. In 2009, the Group of Twenty sought to bolster these by initiating the semi-annual early warning exercise (EWE). Two international institutions — the International Monetary Fund and the Financial Stability Board — were tasked with conducting the EWE. The EWE is a critical mechanism for identifying systemic risks and vulnerabilities; however, several problems constrain its effectiveness. The exercises suffer from unclear goals, a lack of coordination, geographical separation, insufficient organizational capacity and ad hoc procedures. This policy brief offers recommendations that would help improve the effectiveness of the EWE.
Coordination Critical to Ensuring the Early Warning Exercise is Effective
CIGI-BSIA Policy Brief No. 4