Financial crisis response plan
AbstractDespite the recent highs and lows in international finance, the need for better understanding on the part of policy-makers, business leaders and the general public is evident to address future crisis. The study of other countries’ financial difficulties in recent history seems to be a key element missing in our nation’s response. The economy is too important to leave up to an ill prepared ad hoc emergency meeting. Rather than throwing together a government response, just-in-time at best, it would be advantageous to have a plan ready to pull off the shelf. For such a plan, this paper suggests guiding principles, a plan outline, and options available to the policy-maker in the form of a Financial Crisis Response Plan (FCRP). It should mirror a typical government disaster response plan to some extent, but tailored to assist the Federal government’s response to a myriad of financial crises. The guiding principles for any financial response could be used for a just-in-time response, or for planning and writing plans in between crisis. The plan should be one that is A-political in nature, clearly identifies the problems, considers legal options available, and roles of responders. Such a plan should have strong measurable goals, and strive for universal application, cost savings to the tax-payer, consider all parties welfare including overseas counterparts, and a return to profitable business operations. Any plan developed must be comprehensive to all participating parties, with scheduled training and exercises. Study of past crises and non-traditional sources will not replace but supplement existing principles utilized by government institutions. Several historical works of economists as well as more recent writings like those of Reinhart & Rogoff (2008) touch on financial crisis. The bulk of research for this paper was through foreign central bankers. Central banks have been through similar crises, and have suggested courses of action similar to the FCRP. Additionally, lesser known writers or economists, particularly those outside government payroll or Wall Street, have some value in the discussion. No one person will have all the answers and no single plan will be the ultimate government response, but many options should be explored. Thus, the plan here-in will not attempt to provide all the answers, but a framework for policy-makers (locally and globally) to arrive at those solutions.
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 University Library of Munich, Germany in its series MPRA Paper with number 28166.
Date of creation: May 2010
Date of revision: 27 Jan 2011
The paper recommends a government Financial Crisis Response Plan; with several options and guidelines described.;
Find related papers by JEL classification:
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
This paper has been announced in the following NEP Reports:
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.:
- Glenn Hoggarth & Jack Reidhill & Peter Sinclair, 2004. "On the resolution of banking crises: theory and evidence," Bank of England working papers 229, Bank of England.
- Allen, Franklin & Gale, Douglas, 1999. "Bubbles, Crises, and Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 15(3), pages 9-18, Autumn.
- Reinhart, Carmen & Kaminsky, Graciela, 1999.
"The twin crises: The causes of banking and balance of payments problems,"
14081, University Library of Munich, Germany.
- Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
- Graciela L. Kaminsky & Carmen M. Reinhart, 1996. "The twin crises: the causes of banking and balance-of-payments problems," International Finance Discussion Papers 544, Board of Governors of the Federal Reserve System (U.S.).
- Carmen M. Reinhart & Kenneth S. Rogoff, 2008.
"This Time is Different: A Panoramic View of Eight Centuries of Financial Crises,"
CEMA Working Papers
595, China Economics and Management Academy, Central University of Finance and Economics.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 1065-1188, November.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2008. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," NBER Working Papers 13882, National Bureau of Economic Research, Inc.
- Stephany Griffith-Jones & José Antonio Ocampo, 2009. "The Financial Crisis and Its Impact on Developing Countries," Working Papers 53, International Policy Centre for Inclusive Growth.
- Bernanke, Ben S, 1983.
"Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression,"
American Economic Review,
American Economic Association, vol. 73(3), pages 257-76, June.
- Ben S. Bernanke, 1983. "Non-Monetary Effects of the Financial Crisis in the Propagation of the Great Depression," NBER Working Papers 1054, National Bureau of Economic Research, Inc.
- O. Emre Ergungor, 2007. "On the resolution of financial crises: the Swedish experience," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Jun.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.