Four Futures for Finance; A scenario study
AbstractThis document presents four scenarios for the future of finance. The goal of our study is to imagine the future of finance and to identify challenges faced by policymakers in fighting systemic risk. It builds upon a tradition within the CPB to develop scenarios for policy analysis. We develop four scenarios for the future of finance. Our scenarios differ in two dimensions. First, to what extent soft information lies at the core of banks’ business. Second, to what extent scope economies exist between different banking activities. By combining these two dimensions, we obtain four scenarios: Isolated Islands, Big Banks, Competing Conglomerates, and Flat Finance. Market structure, market failures, and government failures vary between scenarios. These differences then translate into differences in the complexity of balance sheets, the ability to coordinate policy internationally, the information gap faced by regulators, the size of banks’ balance sheets, the tradability of banks’ assets, the level of interconnectedness, the potential for market discipline, and the threat of regulatory capture. As a result, each scenario calls for a different set of policies to combat systemic risk.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Document with number 211.
Date of creation: Sep 2010
Date of revision:
Find related papers by JEL classification:
- G01 - Financial Economics - - General - - - Financial Crises
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-25 (All new papers)
- NEP-CFN-2010-09-25 (Corporate Finance)
- NEP-RMG-2010-09-25 (Risk Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michiel van Leuvensteijn & Jacob Bikker & Adrian van Rixtel & Christoffer Kok-Sorensen, 2007.
"A new approach to measuring competition in the loan markets of the euro area,"
DNB Working Papers
143, Netherlands Central Bank, Research Department.
- Michiel van Leuvensteijn & Jacob Bikker & Adrian van Rixtel & Christoffer Kok S�rensen, 2011. "A new approach to measuring competition in the loan markets of the euro area," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3155-3167.
- van Leuvensteijn, Michiel & Bikker, Jacob A. & Van Rixtel, Adrian & Kok, Christoffer, 2007. "A new approach to measuring competition in the loan markets of the euro area," Working Paper Series 0768, European Central Bank.
- Michiel van Leuvensteijn & Jacob A. Bikker & Adrian van Rixtel & Christoffer Kok-Sørensen, 2007. "A new approach to measuring competition in the loan markets of the euro area," Banco de Espaï¿½a Working Papers 0736, Banco de Espa�a.
- Michiel van Leuvensteijn & J.A. Bikker & A.A.R.J.M. Rixtel & C. Kok-Sorensen, 2007. "A new approach to measuring competition in the loan markets of the Euro area," CPB Discussion Paper 84, CPB Netherlands Bureau for Economic Policy Analysis.
- Leuvensteijn, Michiel van & Bikker, Jacob A. & Rixtel, Adrian A.R.J.M. van & Kok-Sørensen, Christoffer, 2007. "A new approach to measuring competition in the loan markets of the euro area," CEI Working Paper Series 2007-6, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
- Robert DeYoung & Douglas Evanoff & Philip Molyneux, 2009. "Mergers and Acquisitions of Financial Institutions: A Review of the Post-2000 Literature," Journal of Financial Services Research, Springer, vol. 36(2), pages 87-110, December.
- Vicente Cuñat & Maria Guadalupe, 2009.
"Globalization and the Provision of Incentives inside the Firm: The Effect of Foreign Competition,"
Journal of Labor Economics,
University of Chicago Press, vol. 27(2), pages 179-212, 04.
- Cuñat, Vicente & Guadalupe, Maria, 2006. "Globalization and the Provision of Incentives Inside the Firm: The Effect of Foreign Competition," IZA Discussion Papers 2408, Institute for the Study of Labor (IZA).
- Vicente Cuñat & Maria Guadalupe, 2009. "Globalization and the provision of incentives inside the firm: The effect of foreign competition," Economics Working Papers 1134, Department of Economics and Business, Universitat Pompeu Fabra.
- J. G. Haubrich, .
"Financial Intermediation: Delegated Monitoring and Long-Term Relationships,"
Rodney L. White Center for Financial Research Working Papers
9-86, Wharton School Rodney L. White Center for Financial Research.
- Haubrich, Joseph G., 1989. "Financial intermediation : Delegated monitoring and long-term relationships," Journal of Banking & Finance, Elsevier, vol. 13(1), pages 9-20, March.
- J.G. Haubrich, . "Financial Intermediation: Delegated Monitoring and Long-Term Relationships," Rodney L. White Center for Financial Research Working Papers 09-86, Wharton School Rodney L. White Center for Financial Research.
- Dell'Ariccia, Giovanni & Marquez, Robert, 2006. "Competition among regulators and credit market integration," Journal of Financial Economics, Elsevier, vol. 79(2), pages 401-430, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.