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In the immediate wake of the worst global financial crisis in decades, political leaders everywhere vowed to do whatever was necessary to rein in risk-taking incentives and prevent system-wide meltdowns.

To call the pace of that reform over the past five years plodding is an insult to turtles.

"Plainly, there is unfinished business," says Andrew Haldane, the Bank of England's executive director for financial stability. "Whether in structure or incentives, we have not seen very much repaired. …We are seeing almost no valuable reformation of the system we inherited."

Mr. Haldane has the bruises from fierce counterattacks by Big Finance to show how difficult the road to reform has been. He also has the numbers to underscore how little progress has been made.

Each initiative to bolster financial regulations, tighten standards and reduce risk has prompted bankers to warn that their balance sheets would be crippled and the financial system brought to its knees, Mr. Haldane told a conference in Toronto sponsored by the Institute for New Economic Thinking and the Centre for International Governance Innovation.

But this is a case where reality and rhetoric are not on speaking terms.

The 29 financial powerhouses designated as global systemically important banks (G-SIBs in regulator-speak) are all bigger and just as complex, interconnected and exposed to risk as ever.

The average size of their balance sheets in 2006 was about $1.35-trillion (U.S.), or roughly the size of an average G7 economy. By the end of last year, the average had ballooned to about $1.76-trillion.

To examine how interconnected the biggest banks are – and hence how exposed they could be to financial contagion – Mr. Haldane turned to the phenomenal growth of their derivatives portfolios. Back in the halcyon days of 2006, the average notional value of derivatives outstanding was $19-trillion, or about one-third of global GDP. Today? A mind-boggling figure in excess of $30-trillion.

Then there is the remarkable complexity of their balance sheets. In 2006, the world's mightiest banks each had an average of 300 distinct legal entities, and some had 10 times that number. Surely, that's been cleaned up in the drive for simplicity? Wrong. The average is roughly the same or a tad higher.

The same holds true for their holdings of complex trading instruments. These accounted for an average of 22 per cent of assets in 2006. Today, the level is still close to 20 per cent.

Well, at least they have reduced their leverage – to an average ratio of 20 times (measured by total assets to common equity) from 32. But we shouldn't take any comfort from that, Mr. Haldane says. At that level of leverage, it would only take a 5 per cent decline in the value of assets, and "you are in the gutter." If history is any guide, we can expect that to happen at some time in the next 20 years.

Executive pay is another controversial subject. The average CEO packet has shrunk from $20-million a year before the crisis "to something close to the minimum wage" for a bank chief – $9-million.

After this rather bleak report on the progress for reform, Mr. Haldane cheerfully noted that he hadn't even touched on the systemic risks posed by such unlit corners of the financial world as shadow banks, clearing houses or big asset managers. Each, he warned, could be "a time bomb waiting to explode. We are still in the intellectual foothills of thinking about those risks."

If anyone came away from the discussion feeling optimistic about the prospects for future reform, "that person is seriously deluded," influential Financial Times columnist Martin Wolf said.

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