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

The determinants of banks’ liquidity buffers and the role of liquidity regulation

Clemens Bonner, Iman van Lelyveld, Robert Zymek, 1 November 2013

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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.

Topics: Financial markets, Microeconomic regulation
Tags: banking, disclosure, liquidity, regulation, Too big to fail, transparency

A game changer: The EU banking recovery and resolution directive

Thomas Huertas, María J Nieto, 19 September 2013

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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:

Topics: Financial markets
Tags: banks, moral hazard, Too big to fail

Is there a future for international banks?

Dirk Schoenmaker, 25 August 2013

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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.

Topics: Global crisis, International finance
Tags: banking, Eurozone crisis, international banks, Too big to fail

Big banks and macroeconomic outcomes

Franziska Bremus, Claudia M. Buch, Katheryn Russ, Monika Schnitzer, 10 July 2013

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Does the mere presence of big banks affect macroeconomic outcomes?

Topics: International finance
Tags: banking, Too big to fail

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

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This column is a lead commentary in the VoxEU Debate "Banking reform: Do we know what has to be done?"

Topics: International finance
Tags: banks, Finance, financial regulation, global crisis, taxpayers, Too big to fail

Have we solved 'too big to fail'?

Andrew G Haldane, 17 January 2013

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No.

Topics: Financial markets
Tags: bank regulation, Too big to fail

Macroeconomic adjustment and the history of crises in open economies

Joshua Aizenman, Ilan Noy, 21 November 2012

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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.

Topics: Financial markets, Institutions and economics
Tags: Banking crisis, regulation, Too big to fail

Destabilising market forces and the structure of banks going forward

Arnoud Boot, 25 October 2011

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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.

Topics: Financial markets, International finance
Tags: complexity, macroprudential regulation, systemic risk, Too big to fail

Incentive pay and bailouts

Tim Besley, Maitreesh Ghatak, 27 August 2011

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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.

Topics: Global crisis, Global governance, International finance, Politics and economics
Tags: Bailouts, financial regulation, Too big to fail

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