Magdalena Ignatowski, Josef Korte, 20 May 2014

Can a tightening in the bank resolution regime introduce more prudent bank behaviour? This column reviews some arguments for why this could be the case. It presents evidence linking changes in bank resolution regimes with bank behaviour. Tightening of US bank resolution significantly decreased the overall risk-taking of the most affected banks. This effect, however, does not hold for the largest and most systemically important banks. Too-big-to-fail seems to be unresolved.

Rhiannon Sowerbutts, Ilknur Zer, Peter Zimmerman, 05 April 2014

Inadequate disclosure by banks increased funding costs and contributed to the recent crisis. This column presents quantitative indices to measure progress of disclosure between banks and over time. Internationally, disclosure has improved since 2000. However, more information alone is not sufficient to solve the problem. More needs to be done to ensure that the information provided is useful to investors, and that investors are incentivised to use this information. The ongoing reform agenda aims to address this.

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