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.
Are banks too large?
Lev Ratnovski, Luc Laeven, Hui Tong, 31 May 2014
The determinants of banks’ liquidity buffers and the role of liquidity regulation
Clemens Bonner, Iman van Lelyveld, Robert Zymek, 1 November 2013
Until recently, liquidity risk was not the main focus of banking regulators. However, the 2007–2009 crisis showed how rapidly market conditions can change, exposing severe liquidity risks for some institutions. Although capital buffers were effective in reducing liquidity stress to some extent, they were not always sufficient.
A game changer: The EU banking recovery and resolution directive
Thomas Huertas, María J Nieto, 19 September 2013
To end moral hazard and “too big to fail”, investors, not taxpayers, should bear the loss associated with bank failures. Recently, ECOFIN took a major step in this direction. It agreed a common position with respect to the Banking Recovery and Resolution Directive. If confirmed in the trialogue with the Commission and the European Parliament, the Directive will:
Is there a future for international banks?
Dirk Schoenmaker, 25 August 2013
The international, centralised, business model of banks has come under pressure after the global financial crisis. Supervisors are leaving their traditional consolidated approach, under which a bank as a whole is assessed. Instead, they are moving towards a stand-alone approach, under which the national subsidiaries are supervised separately.
Big banks and macroeconomic outcomes
Franziska Bremus, Claudia M. Buch, Katheryn Russ, Monika Schnitzer, 10 July 2013
Does the mere presence of big banks affect macroeconomic outcomes?
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?"
Have we solved 'too big to fail'?
Andrew G Haldane, 17 January 2013
Macroeconomic adjustment and the history of crises in open economies
Joshua Aizenman, Ilan Noy, 21 November 2012
Looking at recent banking crises, Gourinchas and Obstfeld (2012) have identified domestic-credit booms and real currency appreciation as the most significant predictors of future banking crises in both advanced and emerging economies1. An optimistic conjecture is that countries that previously experienced banking crises will tend to be more cautious.
Destabilising market forces and the structure of banks going forward
Arnoud Boot, 25 October 2011
The financial services sector has gone through unprecedented turmoil in the last few years. We see fundamental forces that have affected the stability of financial institutions. In particular, information technology has led to an enormous proliferation of financial markets, but also opened up the banks’ balance sheets by enhancing the marketability of their assets.
Incentive pay and bailouts
Tim Besley, Maitreesh Ghatak, 27 August 2011
While it seems that the worst of the financial crisis of 2008 is over, most of the structural issues that lay behind it remain unresolved. This includes distortions in incentive pay due to government protection of investors from downside risk.
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- Long-term damage of the US court’s Argentinian debt rulingFrankel
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- Debt, deleveraging, and the liquidity trap: A new modelKrugman
CEPR Policy Research
- The buyer margins of firms' exportsCarballo, Ottaviano, Volpe
- Commodity and Equity Markets: Some Stylized Facts from a Copula ApproachDelatte, Lopez
- Ethnic Unemployment Rates and Frictional MarketsGobillon, Rupert, Wasmer
- Finance and Poverty: Evidence from IndiaAyyagari, Beck, Hoseini
- The Manipulation of Basel Risk-WeightsMariathasan, Merrouche
- The economics of Scottish independence in an interdependent worldHughes Hallett
- Making city lights shine brighterYusuf, Leipziger
- The euro in the 'currency war'Bénassy-Quéré, Martin
- The roots of shadow bankingPerotti
- What’s wrong with Europe?Baldini, Manasse