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Crisis Regulation Demand

Author

Listed:
  • Mohammad Jaradat

    (Bogdan Voda University of Cluj-Napoca)

  • Marius M. Motocu

    (Bogdan Voda University of Cluj-Napoca)

Abstract

This paper argues and identifies in its previous part the main hallmarks of the crisisas too-big-to-fail institutions that took on too much risk, insolvency resulting from contagion andcounterparty risk, the lack of regulatory and supervisory integration, and the lack of efficientresolution regimes. Then this article looks at how the Basel III proposals address these issues,helping to reduce the chance of another crisis like the current one. The Basel III capital proposalshave some very useful elements, notably a leverage ratio, a capital buffer and the proposal to dealwith pro-cyclicality through dynamic provisioning based on expected losses. However, this articlealso identifies some major concerns.

Suggested Citation

  • Mohammad Jaradat & Marius M. Motocu, 2010. "Crisis Regulation Demand," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(12), pages 1-40.
  • Handle: RePEc:alu:journl:v:1:y:2010:i:12:p:40
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    File URL: http://oeconomica.uab.ro/upload/lucrari/1220101/40.pdf
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    References listed on IDEAS

    as
    1. Demirgüç-Kunt, Asli & Huizinga, Harry, 2010. "Bank activity and funding strategies: The impact on risk and returns," Journal of Financial Economics, Elsevier, vol. 98(3), pages 626-650, December.
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    More about this item

    Keywords

    crisis; capital buffer; leverage ratio; pro-cyclicality; liquidity coverage ratio.;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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