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Setting the right framework for modern financial markets – Lessons learned from the recent crisis

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  • Banziger, H.

Abstract

The current financial crisis is a watershed event that will require comprehensive action by the financial industry to restore confidence in financial institutions in general and the market for structured credit products specifically. The originate-and-distribute model will survive, but will undergo modification and will require banks to upgrade their operations. An improvement in risk management (both in approach and process) is the most important area, with additional focus on liquidity management and derivatives markets infrastructure. Regarding valuation issues, reform efforts must recognise that this is not “just” an accounting issue. Changes must respect the benefits of fair value accounting, but, at the same time, address the issues of illiquid markets, procyclicality and consistency between accounting standards.

Suggested Citation

  • Banziger, H., 2008. "Setting the right framework for modern financial markets – Lessons learned from the recent crisis," Financial Stability Review, Banque de France, issue 12, pages 7-14, October.
    • Handle: RePEc:bfr:fisrev:2008:12:2
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    File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/financial-stability-review-12_2008-10.pdf
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    Cited by:

    1. repec:zbw:bofrdp:2009_029 is not listed on IDEAS
    2. Vauhkonen, Jukka, 2009. "Bank safety under Basel II capital requirements," Bank of Finland Research Discussion Papers 29/2009, Bank of Finland.
    3. Vauhkonen, Jukka, 2009. "Bank safety under Basel II capital requirements," Research Discussion Papers 29/2009, Bank of Finland.
    4. Jukka Vauhkonen, 2012. "The Impact of Pillar 3 Disclosure Requirements on Bank Safety," Journal of Financial Services Research, Springer;Western Finance Association, vol. 41(1), pages 37-49, April.

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