The Role of the State in Managing and Forestalling Systemic Financial Crises: Some Issues and Perspectives
AbstractThis paper reviews recent state interventions in financial crises and draws lessons for crisis management. A number of areas are identified where crisis management could be strengthened, including with regard to the tools and instruments used to involve the private sector in crisis resolution (with a view to reducing the recent enhanced role of official bailouts and the associated moral hazard), to allow for the orderly resolution of systemically important financial firms (to make these firms "safe to fail"), and with regard to achieving better integration with ex ante macroprudential surveillance. The paper proposes the establishment of high level systemic risk councils (SRCs) in each country with responsibility for overseeing systemic risk in both tranquil times and crisis periods and coordinating the activities of key government ministries, agencies, and the central bank.
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Bibliographic InfoPaper provided by Asian Development Bank Institute in its series ADBI Working Papers with number 242.
Length: 29 pages
Date of creation: 16 Aug 2010
Date of revision:
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global financial crisis; state intervention; macroprudential surveiilance; crisis resolution; prevention;
Find related papers by JEL classification:
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- G01 - Financial Economics - - General - - - Financial Crises
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-28 (All new papers)
- NEP-BAN-2010-08-28 (Banking)
- NEP-CBA-2010-08-28 (Central Banking)
- NEP-CTA-2010-08-28 (Contract Theory & Applications)
- NEP-MAC-2010-08-28 (Macroeconomics)
- NEP-SEA-2010-08-28 (South East Asia)
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- Peter J. Morgan & Mario Lamberte, 2012.
"Strengthening Financial Infrastructure,"
Finance Working Papers
23191, East Asian Bureau of Economic Research.
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