The Vickers Commission’s failure

Laurence J. Kotlikoff 26 October 2012

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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. Millions more are short on work – working part time or in jobs below, if not far below, their skill levels.

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Topics:  International finance Macroeconomic policy

Tags:  UK, financial regulation, banking sector, Vickers Commission

Banks and cross-border capital flows: Policy challenges and regulatory responses

Markus K Brunnermeier, José De Gregorio, Philip R. Lane, Hélène Rey, Hyun Song Shin 07 October 2012

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The textbook case for financial integration is well known. It allows capital to flow from capital-rich to capital-poor economies, where returns should be higher. These flows complement limited domestic saving in capital-poor countries and reduce their cost of capital, boosting investment and growth. Financial integration may also be a buffer against shocks and carry “collateral” or indirect benefits to do with managerial and organisational expertise, or better governance of local firms.

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Topics:  International finance

Tags:  financial sector, banking sector

What is the contribution of the financial sector?

Andrew G Haldane, Vasileios Madouros 22 November 2011

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There is no doubting the financial sector has a significant impact on the real economy. Financial crisis experience makes this only too clear.1 Financial recessions are both deeper and longer-lasting than normal recessions. At this stage of a normal recession, output would be about 5% above its pre-crisis level. Today, in the UK, it remains about 3.5% below. So this much is clear: Starved of the services of the financial sector, the real economy cannot recuperate quickly.

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Topics:  Global crisis International finance

Tags:  financial crisis, financial sector, banking sector

Too much finance?

Jean-Louis Arcand, Enrico Berkes, Ugo Panizza 07 April 2011

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The idea that a well-working financial system plays an essential role in promoting economic development dates back to Bagehot (1873) and Schumpeter (1911). Empirical evidence on the relationship between finance and growth is more recent.

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Topics:  Financial markets Global crisis Macroeconomic policy

Tags:  financial regulation, banking sector, Too big to fail, systemic risk

Time for unorthodox monetary policy

John Muellbauer 27 November 2008

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The world economy is trapped in a dangerous global downward spiral of falling asset prices, shrinking credit, and rising bankruptcies, foreclosures and unemployment – all of which feed into more of the same – and drag commodity and now goods prices down with them.1 We were among the first to give a research-based warning of the coming price deflation in our 10 October 2008 column on VoxEU.org.2

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Topics:  Monetary policy

Tags:  monetary policy, financial markets, banking sector, global crisis

Involving European citizens in the benefits of the rescue plan: The political paradoxes of bank socialism

Tito Boeri 15 October 2008

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Leaders of the Eurozone finally agreed on a plan. It is a very ambitious rescue plan – as it should be – to stop the self-fulfilling prophecies that brought us to the brink of another Great Depression. But it should now be made acceptable to European citizens.

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Topics:  Financial markets Welfare state and social Europe

Tags:  taxation, rescue plan, banking sector

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