Commentary: Systemic Risk: Changing the Regulatory Perspective
AbstractThe article puts forward the view that the regulatory perspective on systemic risk should be changed drastically. The sub-prime crisis has indeed revealed many loopholes in the supervisory/regulatory framework for banks—in particular, the inability to deal with the too-big-to-fail syndrome and also the lack of resiliency of interbank and money markets. To a large extent, the contagion phenomena that took place in these markets were the necessary outcomes of the passive attitude of banking supervisors, who have let large banks develop a complex and opaque nexus of bilateral obligations. We propose two reforms: adopting a platform-based (instead of institutionbased) regulatory perspective on systemic risk and encouraging a generalized move to central counterparty clearing.
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Bibliographic InfoArticle provided by International Journal of Central Banking in its journal International Journal of Central Banking.
Volume (Year): 6 (2010)
Issue (Month): 34 (December)
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Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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- Casselmann, Farina, 2013. "Financial services regulation in the wake of the crisis: The Capital Requirements Directive IV and the Capital Requirements Regulation," IPE Working Papers 18/2013, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
- David VanHoose, 2011.
"Systemic Risks and Macroprudential Bank Regulation: A Critical Appraisal,"
NFI Policy Briefs
2011-PB-04, Indiana State University, Scott College of Business, Networks Financial Institute.
- VanHoose, David, 2011. "Systemic Risk and Macroprudential Bank Regulation: A Critical Appraisal," Journal of Financial Transformation, Capco Institute, vol. 33, pages 45-60.
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