Looking back at 2008 and 2009, there was significant leadership on the part of the central banks and governments who did a great deal of work that resulted in coordinated efforts to inject record amounts of liquidity and other stimulus initiatives, avoiding a more dangerous crisis. Indeed, China truly was a leader, as it was the first country to enact a substantive package of wide-ranging stimulus measures.

Subsequent major policy actions implemented by the central banks, governments, as well as actions of the private sector, including the banking system's all-out efforts to recapitalize, has resulted in signs that the worst may be over. There are still challenges ahead however and some new global dynamics means that we can't fall back on old behavior patterns.

For example, there is a new reality for the US consumer who has, until recent times, accounted for approximately 70 percent of the country's GDP as well as provided momentum for global trade flows. The global economy can't look to the US consumer to carry the world on its back, as it had for nearly two decades.

Another new dynamic that cannot be ignored is the potential creation of a North East Asia economic bloc, comprised of Japan, China, and South Korea which would combine the second, third and 13th largest economies in the world.

Looking ahead, there is still the urgent need to sustain, in fact improve, international policy coordination and regulation. Failure to work cohesively across international markets will only generate further momentum to the already troublesome protectionist developments that we are seeing, including the fragmentation of the international financial system.

Needed here is the leadership of such groups as the Basel Committee on Banking Supervision, the Financial Stability Board, and very importantly, the G20. China and the other major emerging market economies have a significant role to play in each of these organizations which need to be vigilant in their work to avoid financial fragmentation. The full benefits of globalized financial markets can only be realized if the new international regulatory architecture is enhanced and fully equipped to help with this critical task. These improvements will also contribute to better management of the risk to systemic stability, inherent in the globalized financial system.

Other issues crucial for stability must also be addressed. First, we need to manage the build up in credit derivatives, especially credit default swaps, which at their height in 2007 were estimated to be nearly $70 trillion in notional value. Even worse, there was no clearing house or appropriate regulation around these instruments.

The second issue is accounting standards. The Financial Stability Board should exercise leadership in securing a renewed commitment to convergence as we need consistency on a global basis in accounting and regulatory standards to advance progress towards greater stability of the international financial system.

The next crucial task will be unwinding the various liquidity measures and tightening monetary policy, both in China and elsewhere in the world. China has begun to take important steps to address this, with the central bank raising bank reserve requirements, and the China Banking Regulatory Committee insisting on increased levels of capital, and suggesting prudence in lending decisions.

There will likely be more tightening to come, given the flow of cash into China's securities and property markets, where some economists are warning of bubbles, but any tightening will be done in the context of sustaining strong balanced growth which remains a policy priority.

During the economic problems of the 1930s, fear spawned the "beggar thy neighbor" trade protectionist approaches. As I think about the ongoing road to recovery, my greatest concern is that we do not head down the same road, doomed to repeat the same past history.

Bill Rhodes is senior vice-chairman of Citigroup and senior vice-chairman of Citibank.