How To Identify Systemically Important Financial Institutions
In: CNB Financial Stability Report 2011/2012
The crisis has brought the issue of regulating large, complex and highly interconnected financial institutions back into the spotlight. Supervisory and other competent authorities have discovered that they have only limited ways of preventing an idiosyncratic shock in one institution from turning into a system-wide shock and of stopping the contagion spreading to other domestic and foreign financial institutions. This article aims to draw attention to the risks associated with the existence of systemically important financial institutions. It discusses methods for identifying systemically important financial institutions, including the approach proposed by BCBS (2011b), which is applied to the Czech banking system for illustration. Overall, our systemic importance results show that there is a large number of normally important financial institutions on average and a very small number of more important institutions. Moreover, there is high variance among the most important institutions in the results. In connection with the newly proposed regulation, the article presents possible instruments for increasing the resilience of such institutions to systemic risk.
|This chapter was published in: Zlatuse Komarkova & Vaclav Hausenblas & Jan Frait CNB Financial Stability Report 2011/2012, , chapter Thematic Article 1, pages 100-111, 2012.|
|This item is provided by Czech National Bank, Research Department in its series Occasional Publications - Chapters in Edited Volumes with number fsr1112/1.|
|Contact details of provider:|| Postal: Na Prikope 28, 115 03 Prague 1|
Phone: 00420 2 2442 1111
Fax: 00420 2 2421 8522
Web page: http://www.cnb.cz/en/research/research_intro/
More information through EDIRC
References listed on IDEAS
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.:
- Jan Frait & Zlatuse Komarkova, 2011. "Financial Stability, Systemic Risk and Macroprudential Policy," Occasional Publications - Chapters in Edited Volumes, in: CNB Financial Stability Report 2010/2011, chapter 0, pages 96-111 Czech National Bank, Research Department.
- Adam Gersl & Jakub Seidler, 2011. "Excessive Credit Growth as an Indicator of Financial (In)Stability and its Use in Macroprudential Policy," Occasional Publications - Chapters in Edited Volumes, in: CNB Financial Stability Report 2010/2011, chapter 0, pages 112-122 Czech National Bank, Research Department.
- Nikola Tarashev & Claudio Borio & Kostas Tsatsaronis, 2010. "Attributing systemic risk to individual institutions," BIS Working Papers 308, Bank for International Settlements.
- Nicolas Véron & Morris Goldstein, 2011.
"Too big to fail: the transatlantic debate,"
- Morris Goldstein & Nicolas Veron, 2011. "Too Big to Fail: The Transatlantic Debate," Working Paper Series WP11-2, Peterson Institute for International Economics.
- Jean-Charles Rochet & Jean Tirole, 1996. "Interbank lending and systemic risk," Proceedings, Board of Governors of the Federal Reserve System (U.S.), pages 733-765.
- Rochet, Jean-Charles & Tirole, Jean, 1996. "Interbank Lending and Systemic Risk," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 733-762, November.
- Upper, Christian, 2011. "Simulation methods to assess the danger of contagion in interbank markets," Journal of Financial Stability, Elsevier, vol. 7(3), pages 111-125, August.
- Goetz von Peter, 2007. "International banking centres: a network perspective," BIS Quarterly Review, Bank for International Settlements, December.
- Christian Weistroffer, 2011. "Identifying Systemically Important Financial Institutions (SIFIs)," Working Papers id:4383, eSocialSciences.
- Sigbjørn Atle Berg, 2011. "Systemic surcharges and measures of systemic importance," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 19(4), pages 383-395, November. Full references (including those not matched with items on IDEAS)