>What are the positive developments in finance since the crisis, and what issues still give ground for concern?

Some developments since the crisis definitely point to greater financial stability:

- reduction in debt leverage among households, companies and banks, which is making them less fragile: weaker link between indebtedness and wealth;

- since end-2009, slowdown in global liquidity growth due to the incipient reduction in "global imbalances";

- investor rejection of overly complex financial assets with overly complicated risk profiles.

But there is reason to worry about:

- the very high demand for return on equity that still persists, which gives an incentive to look for speculative investments (commodities) and which could subsequently lead to a renewed increase in debt leverage;

- the excessive international capital mobility, in particular between emerging and OECD countries, which is destabilising the economies of emerging countries;

- the conflicts of objectives between regulators, who have a huge risk aversion, and economic policy decision-makers, who normally favour the long-term financing of the economy. Regulators may go too far and hurt long-term growth (with Basel III, Solvency) or financial market liquidity (due to the excessive discouragement of trading).

- the excessive and useless liquidity in OECD countries (but not in emerging countries, as we saw above), which persists, especially in the United States.

To read the full report: POSITIVE DEVELOPMENTS IN FINANCE