Why supervisors should continue measuring financial risks – the fallacy of simple rules

Lars Frisell 07 November 2012

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Measuring financial risk is notoriously difficult. But no more difficult than measuring any other risk. Take, for example, the risk of flooding. In order to calculate the optimal height of a seawall one must take into account the regular variation of the sea level caused by the moon’s gravity, the shape of the shoreline, the probability of extreme events such as hurricanes and tsunamis, alongside myriad other factors. Such deliberations – and experience - have resulted in very different structures of seawalls, from high-rising concrete walls to porous mounds.

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Topics:  Financial markets Global crisis Institutions and economics International finance

Tags:  risk, global crisis, global crisis debate, leverage ratios, capital charges

Real Time Solutions for US Financial Reform

Viral Acharya, Thomas F Cooley, Matthew Richardson, Ingo Walter,

Date Published

Tue, 12/15/2009

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http://www.voxeu.org/reports/financial_reform.pdf
Tags
global crisis debate, financial market reform, Banking reform

Real time solutions for US financial reform: A new ebook

Viral Acharya, Matthew Richardson, Ingo Walter, Thomas F Cooley 15 December 2009

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November 2008 saw the global financial system on the brink of collapse; the crisis – which began in 2007 – had entered a new and dangerous phase. That time we responded by gathering a group of world-renown financial market experts to evaluate:

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Topics:  Global crisis

Tags:  global crisis debate, financial market reform, Banking reform

Green shoots: Grounds for cautious pessimism

Willem Buiter 29 April 2009

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I am not going to use this opportunity to deepen the gloom by exploring at length the possible consequences of a worldwide pandemic of a virulent form of swine flu. Just a few depressing words will have to suffice. From an economic perspective, a flu pandemic amounts to at least a temporary reduction in the effective supply of labour. If flu-related mortality is high, there will be a permanent reduction in labour supply. The dependency ratio rises (temporarily or permanently, depending on whether mortality increases). Trade and travel are interrupted.

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Topics:  Global crisis

Tags:  global recession, global crisis debate, green shoots

China’s Syndrome: The “dollar trap” in historical perspective

Olivier Accominotti 23 April 2009

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China’s huge volume of dollar reserves is now at the centre of serious concerns about the future of the US currency. The origin of this situation dates back to the early 2000s, after the East Asian and Russian crises. At that time, accumulating foreign reserves was considered benign policy. Developing and emerging countries were encouraged in this way in order to insure against sudden reversals of capital inflows. China was pegging its currency against the dollar and, due to the US trade deficits, started acquiring US assets.

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Topics:  Economic history International finance

Tags:  trade liberalisation, Great Depression, global crisis debate, dollar trap, trading with africa

The Report of the Manuel Committee on IMF Governance Reform: What’s good, what’s less good, and what’s missing?

Biagio Bossone 21 April 2009

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In recent years, especially since the start of the first global crisis of the new millennium, reforming the governance of global finance, particularly the Bretton Woods institutions, has attracted increasing attention from analysts and policymakers involved in international financial issues. The related debate hosted by Vox is a reflection of the broad range of views spanning the issue.

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Topics:  Global governance

Tags:  Institutional reform, IMF reform, global crisis debate, institution reform

Stress tests and the decoupling of Main and Wall Street

Ricardo Caballero 20 April 2009

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As the date for the release of the stress tests on the largest 19 US banks approaches, anxiety levels and strategic positioning are on the rise. One of the main concerns (from a macroeconomic point of view) is whether the stress tests’ parameters are extreme enough given the current scenario.  Opponents of the US Administration’s CAP/PPIP program (i.e. the Capital Assistance Programme and the Public-Private Investment Program) have seized on this concern over the level of severity of the tests – which has some validity – to torpedo the credibility of the entire program.

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Topics:  Financial markets

Tags:  CAP, global crisis debate, stress tests, PPIP

What do the new data tell us?

Barry Eichengreen, Kevin Hjortshøj O’Rourke 08 March 2010

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Editor's Note: This column updates the original Vox columns by Barry Eichengreen and Kevin O’Rourke comparing today’s global financial crisis to the Great Depression. The previous columns have shattered all Vox readership records with over 450,000 views (O’Rourke and Eichengreen 2009). The latest data cover up to February 2010, the original April 2009 column and the subsequent updates appear below. Click here to read the original column.

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Topics:  Global crisis

Tags:  Great Depression, global crisis, global crisis debate, tale of two depressions, Depression, global output, world trade

The G20 communiqué: Work in progress but good news for emerging markets

Guillermo Calvo 06 April 2009

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From the perspective of Financial Architecture, the G20 communiqué represents a major and positive change in the way world leaders view financial crises. They have definitely moved from a view according to which crises are largely homegrown, to a view that allows for the existence of systemic crises, chain-reaction accidents involving many innocent bystanders.

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Topics:  Global crisis

Tags:  emerging markets, global crisis debate, sudden stops

Trade and the London Summit outcome

Richard Baldwin 04 April 2009

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The London Communiqué confirms that issues surrounding international trade have moved up the G20 agenda. The commitments made could have been much stronger, but I believe that what was agreed on protectionism can be graded as “not bad”. On the Doha Round, the Summit’s pledge was pitiful – it should be graded “very sad”. Yet, given the current disarray in the US’s trade policymaking machinery, it was perhaps the best that could have been accomplished.

What did they agree in London?

The commitments on trade fall into three basic categories:

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Topics:  Global crisis

Tags:  trade, G20 Summit, global crisis debate, murky protectionism

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