Learning from Lehman

Indeed, perhaps the most important lesson learned in the aftermath of the collapse of Lehman Brothers is that we can no longer afford to examine problems in terms of individual institutions and from regulatory "silos." The global economy's high degree of interconnectivity, interdependence, and complex feedback mechanisms imply that one weak hub can bring down the entire system.

In other words, the world needs a systemic approach to deal with systemic risks and system failures. Unfortunately, there may be little hope of strengthening global financial governance as long as implementation and enforcement of rules remain at the national level.

Like other emerging markets, China is committed to financial stability and playing its role in reforming the global financial system. China was one of the first countries to sign up to the Basel 3 standards, and further renminbi internationalization will be implemented in a prudent and pragmatic manner. Domestic financial reforms will focus on strengthening policy coordination and moving toward market-determined interest rates and exchange-rate flexibility.

All of these steps will contribute to sustainable domestic growth and a more stable global financial system. Other major emerging economies' policymakers would be wise to act with the same purpose in mind.

The author is a former chairman of the China Banking Regulatory Commission, and Distinguished Fellow at the Fung Global Institute.