The Interplay between regulations and financial stability
File(s)
Published version
Author(s)
Allen, HF
Gu, Xian
Type
Journal Article
Abstract
The crisis demonstrated that microprudential regulation focusing on the risks taken by individual banks is not sufficient to prevent crises. This is because it ignores systemic risk. Six types of systemic risk are identified, namely: (i) panics – banking crises due to multiple equilibria; (ii) banking crises due to asset price falls; (iii) contagion; (iv) financial architecture; (v) foreign exchange mismatches in the banking system; (vi) behavioral effects from Knightian uncertainty. We focus on the first three as they are arguably the main causes of the 2007–9 crisis and consider regulatory and other policies to counteract them.
Date Issued
2018-06-01
Date Acceptance
2018-03-13
Citation
Journal of Financial Services Research, 2018, 53 (2-3), pp.233-248
ISSN
0920-8550
Publisher
Springer Verlag
Start Page
233
End Page
248
Journal / Book Title
Journal of Financial Services Research
Volume
53
Issue
2-3
Copyright Statement
© The Author(s) 2018. This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
Subjects
Social Sciences
Business, Finance
Business & Economics
Financial crises
Asset price bubbles
Contagion
Macroprudential
SYSTEMIC RISK
DEPOSIT INSURANCE
BANK RUNS
TO-MARKET
CONTAGION
NETWORKS
LIQUIDITY
DISTRESS
PANICS
CRISES
1502 Banking, Finance And Investment
1501 Accounting, Auditing And Accountability
Finance
Publication Status
Published
Date Publish Online
2018-04-18