Are banks too large?

Lev Ratnovski, Luc Laeven, Hui Tong, 31 May 2014

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Large banks have grown significantly in size and become more involved in market-based activities since the late 1990s. Figure 1 shows how the balance-sheet size of the world’s largest banks increased two- to four-fold in the ten years prior to the crisis. Figure 2 illustrates how banks shifted from traditional lending towards market-oriented activities.

Topics: Financial markets
Tags: bank capital, bank regulation, bank resolution, banking, BASEL III, economies of scale, regulation, systemic risk, Too big to fail

Why large American gains from globalisation are plausible

Gary Clyde Hufbauer, Matthew Adler, 24 July 2008

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The Peterson Institute calculates that the US economy was approximately $1 trillion richer in 2003 due to past globalisation – the payoff both from technological innovation and from policy liberalisation – and could gain another $500 billion annually from future policy liberalisation (Bradford, Grieco, and Hufbauer 2005).

Topics: Global economy, International trade
Tags: comparative advantage, economies of scale, globalisation, monopolistic competition, partial equilibrium, productivity gains, safety net, US economy

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