IDEAS home Printed from https://ideas.repec.org/p/bre/wpaper/495.html
   My bibliography  Save this paper

Too big to fail- the transatlantic debate

Author

Listed:
  • Nicolas Véron
  • Morris Goldstein

Abstract

Although the United States and the European Union were bothseriously impacted by the financial crisis of 2007, the resulting policy debates and regulatory responses have differed considerably on the two sides of the Atlantic. This paper by Nicolas Véron and Morris Goldstein examines the debates on the problem posed by "too big to fail" financial institutions. The authors then turn to possible remedies and how they may be differentially implemented...

Suggested Citation

  • Nicolas Véron & Morris Goldstein, 2011. "Too big to fail- the transatlantic debate," Working Papers 495, Bruegel.
    • Handle: RePEc:bre:wpaper:495
    as

    Download full text from publisher

    File URL: https://www.bruegel.org/wp-content/uploads/imported/publications/Nicolas_Veron_WP_Too_big_to_fail_2011_03.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Xavier Vives, 2011. "Competition policy in banking," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 27(3), pages 479-497.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    3. Focarelli, Dario & Pozzolo, Alberto Franco, 2001. "The patterns of cross-border bank mergers and shareholdings in OECD countries," Journal of Banking & Finance, Elsevier, vol. 25(12), pages 2305-2337, December.
    4. Laeven, Luc & Levine, Ross, 2007. "Is there a diversification discount in financial conglomerates?," Journal of Financial Economics, Elsevier, vol. 85(2), pages 331-367, August.
    5. Nicolas Veron & Stephane Rottier, 2010. "Not All Financial Regulation Is Global," Policy Briefs PB10-22, Peterson Institute for International Economics.
    6. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    7. Mr. Wim Fonteyne, 2007. "Cooperative Banks in Europe—Policy Issues," IMF Working Papers 2007/159, International Monetary Fund.
    8. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2003. "Bank concentration and crises," Policy Research Working Paper Series 3041, The World Bank.
    9. Tobias Adrian & Adam B. Ashcraft & Hayley Boesky & Zoltan Pozsar, 2013. "Shadow banking," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 1-16.
      • Tobias Adrian & Adam B. Ashcraft & Hayley Boesky & Zoltan Pozsar, 2010. "Shadow banking," Staff Reports 458, Federal Reserve Bank of New York.
    10. 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 215-268, November.
    11. David C. Wheelock & Paul W. Wilson, 2009. "Are U.S. banks too large?," Working Papers 2009-054, Federal Reserve Bank of St. Louis.
    12. Amel, Dean & Barnes, Colleen & Panetta, Fabio & Salleo, Carmelo, 2004. "Consolidation and efficiency in the financial sector: A review of the international evidence," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2493-2519, October.
    13. Reinhart, Carmen & Rogoff, Kenneth, 2009. "This Time It’s Different: Eight Centuries of Financial Folly-Preface," MPRA Paper 17451, University Library of Munich, Germany.
    14. Morris Goldstein, 2010. "Confronting Asset Bubbles, Too Big to Fail, and Beggar-thy-Neighbor Exchange Rate Policies," Policy Briefs PB10-3, Peterson Institute for International Economics.
    15. Oya Celasun & Geoffrey N. Keim, 2010. "The Us Federal Debt Outlook: Reading the Tea Leaves," IMF Working Papers 2010/062, International Monetary Fund.
    16. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    17. William R. Cline, 2010. "Financial Globalization, Economic Growth, and the Crisis of 2007-09," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 499, October.
    18. James B. Thomson, 2009. "On systemically important financial institutions and progressive systemic mitigation," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Aug.
    19. Allen, Franklin, 1990. "The market for information and the origin of financial intermediation," Journal of Financial Intermediation, Elsevier, vol. 1(1), pages 3-30, March.
    20. Allen N. Berger & Loretta J. Mester, 1997. "Efficiency and productivity change in the U.S. commercial banking industry: a comparison of the 1980s and 1990s," Working Papers 97-5, Federal Reserve Bank of Philadelphia.
    21. Alessandro Giustiniani & Mr. Wim Fonteyne & Wouter Bossu & Alessandro Gullo & Seán Kerr & Mr. Daniel C Hardy & Luis Cortavarria-Checkley, 2010. "Crisis Management and Resolution for a European Banking System," IMF Working Papers 2010/070, International Monetary Fund.
    22. Samuel G. Hanson & Anil K. Kashyap & Jeremy C. Stein, 2011. "A Macroprudential Approach to Financial Regulation," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 3-28, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rachel A. Epstein, 2014. "Assets or liabilities? The politics of bank ownership," Review of International Political Economy, Taylor & Francis Journals, vol. 21(4), pages 765-789, August.
    2. Arnould, Guillaume & Dehmej, Salim, 2016. "Is the European banking system robust? An evaluation through the lens of the ECB׳s Comprehensive Assessment," International Economics, Elsevier, vol. 147(C), pages 126-144.
    3. Ceyla Pazarbasioglu & Luc Laeven & Oana M Croitoru & Stijn Claessens & Fabian Valencia & Marc C Dobler & Katharine Seal, 2011. "Crisis Management and Resolution; Early Lessons from the Financial Crisis," IMF Staff Discussion Notes 11/05, International Monetary Fund.
    4. Nicolas Véron, 2012. "Financial reform after the crisis- an early assessment," Working Papers 680, Bruegel.
    5. Zlatuse Komarkova & Vaclav Hausenblas & Jan Frait, 2012. "How To Identify Systemically Important Financial Institutions," Occasional Publications - Chapters in Edited Volumes, in: CNB Financial Stability Report 2011/2012, chapter 0, pages 100-111, Czech National Bank.
    6. Fariborz Moshirian, 2014. "Implications of global financial and regulatory policies on systemic risk in Asia," Chapters, in: Iwan J. Azis & Hyun S. Shin (ed.), Global Shock, Risks, and Asian Financial Reform, chapter 8, pages 284-332, Edward Elgar Publishing.
    7. Bertay, Ata Can & Demirgüç-Kunt, Asli & Huizinga, Harry, 2013. "Do we need big banks? Evidence on performance, strategy and market discipline," Journal of Financial Intermediation, Elsevier, vol. 22(4), pages 532-558.
    8. Dijkman,Miquel, 2015. "Monitoring financial stability in developing and emerging economies : practical guidance for conducting macroprudential analysis," Policy Research Working Paper Series 7248, The World Bank.
    9. Morris Goldstein, 2011. "Integrating Reform of Financial Regulation with Reform of the International Monetary System," Working Paper Series WP11-5, Peterson Institute for International Economics.
    10. Teh Tian Huey & Daniel Chin Shen Li, 2017. "Measuring bank risk-taking behaviour: the risk-taking channel of monetary policy in Malaysia," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Statistical implications of the new financial landscape, volume 43, Bank for International Settlements.
    11. Lucia Quaglia & Aneta Spendzharova, 2017. "Post‐crisis reforms in banking: Regulators at the interface between domestic and international governance," Regulation & Governance, John Wiley & Sons, vol. 11(4), pages 422-437, December.
    12. Teh Tian Huey & Daniel Chin Shen Li, 2016. "Measuring bank risk-taking behaviour - The risk-taking channel of Monetary Policy in Malaysia," IFC Working Papers 16, Bank for International Settlements.
    13. Rachel A. Epstein & Martin Rhodes, 2014. "Banking Nationalism on the Road to Banking Union," KFG Working Papers p0061, Free University Berlin.
    14. Edwin M. Truman, 2013. "Asian and European Financial Crises Compared," Working Paper Series WP13-9, Peterson Institute for International Economics.
    15. Nicolas Véron, 2013. "A realistic bridge towards European banking union," Policy Contributions 783, Bruegel.
    16. Barth, James R. & Prabha, Apanard & Swagel, Phillip, 2012. "Just How Big Is the Too Big to Fail Problem?," Working Papers 12-06, University of Pennsylvania, Wharton School, Weiss Center.
    17. Alexandru Huza, 2013. "G20’s Emergence as Leading Global Economic Governance Forum," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(3), pages 145-149, September.
    18. Nicolas Veron & Guntram B. Wolff, 2013. "From Supervision to Resolution: Next Steps on the Road to European Banking Union," Policy Briefs PB13-5, Peterson Institute for International Economics.
    19. Giuseppe Mastromatteo & Giuseppe Mastromatteo, 2016. "Minsky at Basel: A Global Cap to Build an Effective Postcrisis Banking Supervision Framework," Economics Working Paper Archive wp_875, Levy Economics Institute.
    20. Kaori Fujishiro & Emily Q. Ahonen & Megan Winkler, 2022. "Investigating Employment Quality for Population Health and Health Equity: A Perspective of Power," IJERPH, MDPI, vol. 19(16), pages 1-16, August.
    21. Rudolph, Bernd, 2014. "Bankregulierung zur Lösung des „too big to fail“-Problems," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 68(2), pages 72-91.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nicola Gennaioli & Andrei Shleifer & Robert W. Vishny, 2013. "A Model of Shadow Banking," Journal of Finance, American Finance Association, vol. 68(4), pages 1331-1363, August.
    2. Claudio Borio, 2011. "Rediscovering the Macroeconomic Roots of Financial Stability Policy: Journey, Challenges, and a Way Forward," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 87-117, December.
    3. Anjan V. Thakor, 2023. "Finance research: What are the new frontiers?," The Financial Review, Eastern Finance Association, vol. 58(3), pages 453-462, August.
    4. Viral V. Acharya & Matthew Richardson, 2012. "Implications of the Dodd-Frank Act," Annual Review of Financial Economics, Annual Reviews, vol. 4(1), pages 1-38, October.
    5. Andrew G. Haldane, 2010. "La pregunta de los 100 mil millones," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 12(22), pages 83-110, January-J.
    6. Thomas Philippon, 2015. "Has the US Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation," American Economic Review, American Economic Association, vol. 105(4), pages 1408-1438, April.
    7. Ebrahimi Kahou, Mahdi & Lehar, Alfred, 2017. "Macroprudential policy: A review," Journal of Financial Stability, Elsevier, vol. 29(C), pages 92-105.
    8. Christophe André, 2016. "Household debt in OECD countries: stylised facts and policy issues," Chapters from NBP Conference Publications, in: Hanna Augustyniak & Jacek Łaszek & Krzysztof Olszewski & Joanna Waszczuk (ed.), Papers presented during the Narodowy Bank Polski Workshop: Recent trends in the real estate market and its analysis - 2015 edition, chapter 2, pages v1, 33-85, Narodowy Bank Polski.
    9. Xavier Vives, 2011. "Competition and Stability in Banking," Central Banking, Analysis, and Economic Policies Book Series, in: Luis Felipe Céspedes & Roberto Chang & Diego Saravia (ed.),Monetary Policy under Financial Turbulence, edition 1, volume 16, chapter 12, pages 455-502, Central Bank of Chile.
    10. Saki Bigio & Adrien d'Avernas, 2021. "Financial Risk Capacity," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(4), pages 142-181, October.
    11. Jan Libich & Liam Lenten, 2022. "Hero or villain? The financial system in the 21st century," Journal of Economic Surveys, Wiley Blackwell, vol. 36(1), pages 3-40, February.
    12. Falter, Alexander, 2019. "Macro to the rescue? An analysis of macroprudential instruments to regulate housing credit," Discussion Papers 25/2019, Deutsche Bundesbank.
    13. Dimitrios Bisias & Mark Flood & Andrew W. Lo & Stavros Valavanis, 2012. "A Survey of Systemic Risk Analytics," Annual Review of Financial Economics, Annual Reviews, vol. 4(1), pages 255-296, October.
    14. Taylor, Alan M. & Schularick, Moritz & Jordà , Òscar, 2011. "When Credit Bites Back: Leverage, Business Cycles, and Crises," CEPR Discussion Papers 8678, C.E.P.R. Discussion Papers.
    15. Gennaioli, Nicola & Shleifer, Andrei & Vishny, Robert, 2012. "Neglected risks, financial innovation, and financial fragility," Journal of Financial Economics, Elsevier, vol. 104(3), pages 452-468.
    16. Demosthenes Tambakis, 2021. "A Markov chain measure of systemic banking crisis frequency," Applied Economics Letters, Taylor & Francis Journals, vol. 28(16), pages 1351-1356, September.
    17. Grodecka-Messi, Anna & Kenny, Seán & Ögren, Anders, 2021. "Predictors of bank distress: The 1907 crisis in Sweden," Explorations in Economic History, Elsevier, vol. 80(C).
    18. Mircea Epure & Irina Mihai & Camelia Minoiu & José-Luis Peydró, 2017. "Global financial cycle, household credit, and macroprudential policies," Economics Working Papers 1590, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2023.
    19. Beck, T.H.L., 2011. "The Role of Finance in Economic Development : Benefits, Risks, and Politics," Discussion Paper 2011-141, Tilburg University, Center for Economic Research.
    20. repec:cbh:journl:v:14:y:2015:i:1:p:31-55 is not listed on IDEAS
    21. Aikman, David & Haldane, Andrew & Hinterschweiger, Marc & Kapadia, Sujit, 2018. "Rethinking financial stability," Bank of England working papers 712, Bank of England.

    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bre:wpaper:495. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bruegel (email available below). General contact details of provider: https://edirc.repec.org/data/bruegbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.