Fiat lux – Shedding new light on derivatives markets

Not so long ago, we policymakers thought we knew just what challenges we were facing for Europe to better take advantage of globalisation through a more sustainable model: these were climate change and a rapidly ageing society. However, since 2007 we have also learnt that there was another area requiring a deep sustainability check: the financial system. What started in 2007 as a credit crisis in the US market for subprime mortgages turned into a full-blown global fi nancial crisis in 2008, following Lehman’s default and has taken us near to a sovereign debt crisis as countries face the fiscal consequences of financial instability, on top of large public indebtedness. This highlights the importance of the financial system for society as a whole and, therefore, the political imperative of mending it so that finance serves the real economy – not the other way around. We therefore need to put in place a new set of rules and principles ensuring a stable and sustainable financial system. Without this our whole economy will be impeded from prospering again and we will not be able to address the challenges outlined above.