The build-up of leverage in the banking sector played a prominent role in the Global Crisis.1 A standard description the role of leverage corresponds with the typical profile of a financial bubble as reflected in the evolution of the banks of the Eurostoxx 50 (Figure 1).
Assessing leverage in the financial sector through flow data
Javier Villar Burke, 14 November 2013
The impact of liquidity regulation on monetary-policy implementation
Clemens Bonner, Sylvester Eijffinger, 14 October 2013
In response to the recent financial crisis, the Basel Committee on Banking Supervision has drafted a new regulatory framework (henceforth Basel III) with the aim to achieve a more robust banking system. While it also tightens the existing requirements for capital, the proposal stands out as it is the first to attempt harmonised liquidity regulation across the globe.
Everything the IMF wanted to know about financial regulation and wasn’t afraid to ask
Sheila Bair, 9 June 2013
I was honoured when the IMF asked me to moderate the Financial Regulation panel at this year’s Rethinking Macro II conference. And while naturally, I delivered one of the more enlightening and thought-provoking policy discussions of the conference, I did fail in my duties as moderator to make sure my panellists covered all the excellent questions our sponsors submitted to us.
Basel III: Europe’s interest is to comply
Nicolas Véron, 5 March 2013
On 14 February, European Commissioner Michel Barnier and Federal Reserve Governor Daniel Tarullo both indicated their agreement to quickly give the Basel III accord binding force over European and US banks respectively (Jones 2013). This is welcome. But even more important than the speed of adoption is that implementation should stay true to what the accord stipulates.
Hair of the dog that bit us: New and improved capital requirements threaten to perpetuate megabank access to a taxpayer put
Edward J Kane, 30 January 2013
This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?"
A better way to design global financial regulation
Viral Acharya, T Sabri Öncü, 14 January 2013
Over the last year, it has seemed as though not a single day passed without an internationally prominent figure – economist or politician – urging effective implementation and better coordination of the new financial regulations currently under construction around the globe.
The Vickers Commission’s failure
Laurence J. Kotlikoff, 26 October 2012
The UK is still reeling from the great financial crash. Real GDP remains below its 2007 level, the nation’s 8.4% unemployment rate is at a 16-year high, and youth unemployment is over 20% (BBC 2012). Over three million UK citizens can’t find work or have given up looking.
Not making the grade: Report card on global financial reform
Laura Kodres, 15 October 2012
The global reform agenda aims to make the financial system safer while allowing it to provide the intermediation services needed to fuel strong and stable economic growth. The reform is well underway, but there is still a long way to go (Bush and Farrant 2011, Campos and Nugent 2011).
Should Europe reconsider its supervisory governance? Two is better than one
Donato Masciandaro, Marc Quintyn , 14 October 2012
In the aftermath of the first wave of the 2008 financial crisis, few analyses zoomed in on supervisory failures (as opposed to regulatory failures) as one of the contributing factors to the crisis.
Funding innovation: ‘How’ is as important as ‘how much’
Johan Hombert, Adrien Matray, 12 October 2012
Does banking structure matter when it comes to fund innovation? Should states simply deregulate their banking markets or on the contrary, try to promote local banks?
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