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New Theories to Underpin Financial Reform

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  • Allen, Franklin

    (University of PA)

  • Carletti, Elena

    (European University Institute)

Abstract

Before 2007, financial crises were not widely studied in economics and finance. The lack of importance ascribed to financial stability and our limited knowledge of this topic were significant contributors to the crisis. This paper suggests five areas where new theories are needed. These are asset price bubbles, central bank checks and balances, banking regulation, and competition in financial services.

Suggested Citation

  • Allen, Franklin & Carletti, Elena, 2011. "New Theories to Underpin Financial Reform," Working Papers 11-40, University of Pennsylvania, Wharton School, Weiss Center.
  • Handle: RePEc:ecl:upafin:11-40
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    File URL: http://fic.wharton.upenn.edu/fic/papers/11/11-40.pdf
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    References listed on IDEAS

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    13. Takeo Hoshi & Anil K. Kashyap, 2004. "Japan's Financial Crisis and Economic Stagnation," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 3-26, Winter.
    14. Allen, Franklin & Carletti, Elena, 2008. "Mark-to-market accounting and liquidity pricing," Journal of Accounting and Economics, Elsevier, vol. 45(2-3), pages 358-378, August.
    15. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467-467.
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    17. Franklin Allen & Ana Babus & Elena Carletti, 2009. "Financial Crises: Theory and Evidence," Annual Review of Financial Economics, Annual Reviews, vol. 1(1), pages 97-116, November.
    18. John R. Conlon, 2004. "Simple Finite Horizon Bubbles Robust to Higher Order Knowledge," Econometrica, Econometric Society, vol. 72(3), pages 927-936, May.
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    32. Franklin Allen, 2001. "Do Financial Institutions Matter?," Center for Financial Institutions Working Papers 01-04, Wharton School Center for Financial Institutions, University of Pennsylvania.
    33. Franklin Allen & Gary Gorton, 1993. "Churning Bubbles," Review of Economic Studies, Oxford University Press, vol. 60(4), pages 813-836.
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    Citations

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    Cited by:

    1. Minoiu, Camelia & Reyes, Javier A., 2013. "A network analysis of global banking: 1978–2010," Journal of Financial Stability, Elsevier, vol. 9(2), pages 168-184.
    2. Tchana Tchana, Fulbert, 2014. "The empirics of banking regulation," Emerging Markets Review, Elsevier, vol. 19(C), pages 49-76.
    3. repec:wly:japmet:v:31:y:2016:i:7:p:1291-1311 is not listed on IDEAS
    4. Gulamhussen, M.A. & Pinheiro, Carlos & Pozzolo, Alberto Franco, 2014. "International diversification and risk of multinational banks: Evidence from the pre-crisis period," Journal of Financial Stability, Elsevier, vol. 13(C), pages 30-43.
    5. repec:spd:journl:v:67:y:2017:i:3:p:49-78 is not listed on IDEAS
    6. Haque, Faizul & Brown, Kym, 2017. "Bank ownership, regulation and efficiency: Perspectives from the Middle East and North Africa (MENA) Region," International Review of Economics & Finance, Elsevier, vol. 47(C), pages 273-293.
    7. André K. Anundsen & Karsten Gerdrup & Frank Hansen & Kasper Kragh‐Sørensen, 2016. "Bubbles and Crises: The Role of House Prices and Credit," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(7), pages 1291-1311, November.
    8. Hippler, William J. & Hassan, M. Kabir, 2015. "The impact of macroeconomic and financial stress on the U.S. financial sector," Journal of Financial Stability, Elsevier, vol. 21(C), pages 61-80.

    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
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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