Implementation of Basel III in the US will bring back the regulatory arbitrage problems under Basel I

Takeo Hoshi, 23 December 2012

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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, Basel, Dodd-Frank, Finance, regulation

The implicit subsidy of banks

Joseph Noss, Rhiannon Sowerbutts, 17 June 2012

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The experience of the crisis has revealed that a credible threat of failure does not always exist for banks. While equity holdings were severely diluted through state intervention, debt holders of some failed banks did not incur losses and were guaranteed by governments. To the extent that neither banks nor their creditors paid for this guarantee, it can be considered an implicit subsidy.

Topics: Financial markets
Tags: banks, implicit subsidy, UK

The impact of corporate governance in financial institutions

Hamid Mehran, Alan Morrison, Joel Shapiro, 6 April 2012

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Topics: Financial markets
Tags: banks, corporate governance, too-big-to-fail

Time to set banking regulation right

Jacopo Carmassi, Stefano Micossi, 28 March 2012

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Excessive leverage and risk-taking by large international banks were among the main causes of the 2008–09 financial crisis and the ensuing sharp drop in economic activity and employment. Enormous costs were borne by taxpayers and societies at large.

Topics: Financial markets
Tags: banking regulation, banks, BASEL III

Macroprudential policy: What instruments and how to use them? Lessons from country experiences

Francesco Columba, Alejo Costa, Cheng Hoon Lim, 16 March 2012

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Macroprudential policy is quickly gaining traction in international circles as a useful tool to address system-wide risks in the financial sector (see for example Borio 2011, Galati and Moessner 2011, Viñals 2010, 2011). Yet the analytical and operational underpinnings of a macroprudential framework are not fully understood and the effectiveness of the instruments is uncertain.

Topics: Financial markets
Tags: banks, Macroprudential policy, systemic risk

Capital shortfall: A new approach to ranking and regulating systemic risks

Viral Acharya, Robert Engle, Matthew Richardson, 14 March 2012

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The most severe impacts of the financial crisis of 2007–09 arose immediately after the failure of Lehman Brothers on 15 September 2008.

Topics: Financial markets, International finance
Tags: banks, capital, systemic risk

Contagion during the Greek sovereign debt crisis

Jakob de Haan, Mark Mink, 23 February 2012

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In the course of 2010, the financial problems of Greece became so severe that the Eurozone countries together with the IMF agreed to provide emergency loans for a total amount of €110 billion, to be disbursed over the period May 2010 through June 2013.

Topics: Financial markets, International finance
Tags: banks, Greece, news, sovereign default

Home bias and the credit crunch: Evidence from Italy

Andrea F Presbitero, Gregory F Udell, Alberto Zazzaro, 12 February 2012

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The management of the Eurozone sovereign debt crisis will have significant effects on the stability of national banking systems, as argued in some recent Vox columns (Acharya et al 2011, Wyplosz 2011).

Topics: Financial markets
Tags: banks, Credit crunch, cross-border banking, Italy

Next-generation system-wide liquidity stress testing

Christian Schmieder, Heiko Hesse, Benjamin Neudorfer, Claus Puhr, Stefan W Schmitz, 1 February 2012

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Bank liquidity was traditionally viewed as of equal importance to solvency. Liquidity risks are inherent in maturity transformation, ie the usual long-term maturity profile of banks’ assets and short-term maturities of liabilities. Banks have commonly relied on retail deposits, and, to some degree, on long-term wholesale funding as supposedly stable sources of funding.

Topics: Financial markets
Tags: banks, liquidity, stress tests

Stop coddling Europe’s banks

Morris Goldstein, 11 January 2012

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After initial denials, Europe’s leaders have started to acknowledge that IMF Chief Christine Lagarde was right. Through their statements and decisions, policymakers are showing their agreement with her assessment in August 2011 at the Federal Reserve’s Jackson Hole symposium that there was an urgent need for recapitalisation of Europe’s banks (Lagarde 2011).

Topics: EU policies, International finance, Politics and economics
Tags: banks, ECB, EFSF, euro bonds, Eurozone crisis, financial regulation, IMF

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