The COVID-19 crisis has had a significant impact on global financial markets, with stock markets falling, firms and governments struggling for cash, and liquidity strains emerging. This paper reviews the evolution of global financial markets since the global financial crisis, the strains seen during the COVID-19 crisis, and the perils that may lie ahead. The author argues that stability will be enhanced if the global community embraces reforms that elevate market resilience, rather than depending on skillful policymakers wielding aggressive but ad hoc policy interventions. The paper is being published as chapter 2 in a book on the prospects of the global economy after COVID-19.
