The Crisis Aftermath: New Regulatory Paradigms

The Editors, 30 March 2012

The Crisis Aftermath: New Regulatory Paradigms

Edited by Mathias Dewatripont and Xavier Freixas

30 March 2012

Topics: Global crisis
Tags: Eurozone crisis, financial regulation, PEGGED, risk-taking

A new eReport: Excessive risk-taking by banks

Richard Baldwin, 30 March 2012



For many, the global crisis was caused by the interlinked fragilities that arose in the banking and financial sectors; these themselves were created by mindless deregulation and permissive monetary policy. By the late 2000s, the system was so precarious that shocks from many directions could have triggered the economic conflagration we witnessed.

Topics: Global crisis, Global economy, Microeconomic regulation
Tags: cross-border banking, macroprudential regulation, risk-taking

Loose monetary policy and excessive credit and liquidity risk-taking by banks

Steven Ongena, José-Luis Peydró, 25 October 2011



A question under intense academic and policy debate since the start of the ongoing severe financial crisis is whether a low monetary-policy rate spurs excessive risk-taking by banks.

Topics: International finance, Monetary policy
Tags: interest rates, monetary policy, risk-taking, subprime loans

Do banks learn from crises?

Ruediger Fahlenbrach, Robert Prilmeier, René M Stulz, 27 May 2011



On 17 August 1998, Russia defaulted on its debt. This event started a dramatic chain reaction. As one observer put it, “the entire global economic system as we know it almost went into meltdown, beginning with Russia's default” (Friedman 1999). As Russia defaulted, a number of investors, including banks, made large losses.

Topics: Global crisis, International trade
Tags: banks, financial crises, risk-taking, Russia

The bright side of bonuses

Thomas Gehrig, Lukas Menkhoff, 2 March 2009



At the height of the financial crisis, it has become popular to blame bonuses as the main culprit, luring top bankers into socially wasteful investments. Bonuses are readily seen as the main drivers of greed and irresponsibly short-sighted behaviour.

Topics: Financial markets, Labour markets
Tags: banks, bonuses, compensation, risk-taking

‘Depression babies’: do macroeconomic experiences affect risk-taking?

Ulrike Malmendier interviewed by Romesh Vaitilingam, 8 Aug 2008

Do people’s personal experiences of economic fluctuations affect their attitudes to risk? Ulrike Malmendier of the University of California, Berkeley, talks to Romesh Vaitilingam about her research on the impact of stock market returns and inflation early in life on risk-taking later in life. The interview was recorded at the American Economic Association meetings in New Orleans in January 2008.


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Topics: Financial markets
Tags: economic fluctuations, risk-taking

The impact of short-term interest rates on risk-taking: hard evidence

Vasso P. Ioannidou, Steven Ongena, José-Luis Peydró, 17 October 2007



In the heat of the summer turmoil in the global financial markets, observers immediately argued that the low levels of short-term interest rates during the 2002-2005 period created the conditions for excessive risk-taking and were consequently one of the main causes of these almost unprecedented credit market convulsions.1,2 Despite the theoreti

Topics: Financial markets
Tags: credit risk, monetary policy, risk-taking, short-term interest rates, Subprime, subprime crisis

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