Financial globalisation brings many benefits, allowing capital to move faster than ever before. Yet it also means that crises can spread far more quickly and widely, contributing to increased market volatility and, consequently, financial shocks. These are detrimental to global economic growth, resilience and poverty reduction, presenting a major challenge for public financial management and economic policy making.

In this age of austerity, fiscal policy is constrained in many countries and monetary policy is reaching its limits. The search is on for new ideas that can offer stability during times of financial crisis. Yet despite repeated efforts to implement new policies, the transmission of financial shocks has consistently thrown economic development off track in emerging market economies.

What political and institutional constraints do central banks, policymakers and financial sector stakeholders face when tackling financial shocks? Is volatility here to stay? And what will it take to catalyse change within this broken system?

Ahead of the International Monetary Fund/World Bank annual meetings, ODI and Standard Chartered Bank assess how economies can counter financial shocks.