Jonathan Portes, 19 December 2009

A strong financial sector is essential to a modern economy, but private actions can impose enormous costs on taxpayers; a balance must be struck. This column explains why the UK Government believes that there is a case for increasing the costs of risk-taking to banks and their shareholders while reducing those borne by taxpayers.

Nicholas Dorn, 18 December 2009

Many observers blame regulatory failure for the financial crisis, arguing for closer international coordination of national regulation. This column argues for the opposite. Regulatory convergence creates instability. Instead, regulatory diversity is needed to reduce market herding and the resulting systemic risks. This diversity can be achieved through stronger democratic oversight of regulators.

Avinash Persaud, 30 October 2009

Avinash Persaud, chairman of Intelligence Capital, talks to Romesh Vaitilingam about financial regulation after the crisis, including whether it is feasible and desirable to introduce a ‘Tobin tax’ on financial transactions. The interview was recorded at the Global Economic Symposium in Schleswig-Holstein in September 2009.

Guillermo Calvo, 27 October 2009

How did turmoil in the US subprime mortgage market ignite a global crisis? This column explains how emerging markets’ voracious appetite for international reserves coupled with record-low US policy interest rates and lax financial regulation to produce the large-scale creation of quasi-money subject to self-fulfilling-expectations runs. The theory suggests significant changes in Fed and regulatory policy are needed.

Jeffry Frieden, 16 October 2009

Jeffry Frieden, professor of government at Harvard University, talks to Romesh Vaitilingam about global economic governance – including the world trading system, financial regulation and the G-20 – and their interactions with domestic politics, particularly in the United States. The interview was recorded at the Global Economic Symposium in Schleswig-Holstein in September 2009.

Donato Masciandaro, Marc Quintyn, 01 August 2009

This column examines the white paper on financial supervision issued by the Obama administration in mid-June. It focuses on the proposal’s preference for interagency cooperation over supervisory consolidation and warns that such an approach, while politically expedient, risks worse governance outcomes.

Guillermo Calvo, Rudy Loo-Kung, 29 June 2009

The financial sector is prone to crises, which are typically associated with serious effects on output and employment. This column weighs the costs and benefits of financial deregulation that spurs temporarily high growth that then collapse and suggests that bubbles may be socially efficient.

Marc Flandreau, Norbert Gaillard, 26 June 2009

How did the rating agencies come to have such a prominent role in the regulation of securities? This column traces their history back to the Great Depression. Ironically, the agencies became a regulatory instrument to address concerns about securities originators’ conflicts of interest, the very problem plaguing the agencies today. The lesson may be that no fixed regulatory solution is durable in the long run.

Avinash Persaud, 24 June 2009

Policymakers embraced the rhetoric of macro-prudential regulation in response to the crisis, but most of their proposals have just suggested more micro-prudential regulations of the sort that already failed. This column criticizes those proposals and outlines what real macro-prudential approaches would look like.

Con Keating, 02 June 2009

The desire to regulate to avoid repeating this financial crisis is commendable, but this column says that the haste with which new regulations are being promulgated is unnecessary and dangerous. Precursory analysis that is incomplete, incorrect, or inadequate creates substantial potential for unintended consequences. We should take the time to appropriately analyse, design, and implement new regulation.

Claudio Borio, 14 April 2009

There is now a growing consensus among policymakers and academics that a key element to improve safeguards against financial instability is to strengthen the “macroprudential” orientation of regulatory and supervisory frameworks. This column explains the approach and various issues that regulators must address to implement it.

Jean-Charles Rochet, Pierre-François Weber, 02 April 2009

The world will see new financial regulations. This column argues that a macro-prudential framework must be part of the regulatory reform. Macro-prudential policy should rely both on automatic regulatory requirements and a more flexible, yet still rules-based framework, possibly similar to the two-pillar monetary framework of the Eurosystem.

Carmine Di Noia, Stefano Micossi, 01 April 2009

What are feasible policy responses to the crisis? This column argues for simple but significant changes in international imbalances, financial regulation, global coordination, and micro-prudential regulation.
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Michael Dooley, Peter Garber, 21 March 2009

This column argues that current account imbalances, easy US monetary policy, and financial innovation are not the causes to blame for the global crisis. It says that attacking Bretton Woods II as a major cause of the crisis is an attack on the world trading system and a sure way to metastasise the crisis in the global financial system into a crisis of the global economic system.

Xavier Freixas, Joel Shapiro, 18 March 2009

Credit rating agencies played a significant part in the financial meltdown, failing (sometimes intentionally) to properly estimate complicated products’ risk. This column summarises the problems plaguing the industry – conflicts of interest, “shopping” for ratings, and informational issues. It concludes that regulators must reshape the agencies and their role.

Willem Buiter, 09 March 2009

Financial regulation is a now-or-never proposition as the sector’s lobbying power is greatly diminished. This column argues that we should embrace robust regulation now, risking over-regulation. Correcting mistakes later would be better than risking another era of “self-” or “soft-touch” regulation.

Andrea Prat, 09 March 2009

Financial regulation was flawed. However, there are signs that regulators could have done much more with the rules and information they had. Even the best rules are useless if regulators are not interested in enforcing them. This column says regulatory bodies should open their books and make their industry connections transparent so we can evaluate and reduce the risk of regulatory capture.

Morris Goldstein, 24 February 2009

This column sketches proposed reforms for regulation, supervision, and oversight of international financial markets. At both the national and international levels, there will be plenty of work to do for the IMF, the FSF, international standard-setting bodies, and national regulators and supervisors.

Charles Calomiris, 12 February 2009

The financial crisis happened because the rules of the game – shaped by government policy – promote the wilful undertaking of excessive, value-destroying risks by managers who were not effectively disciplined by shareholders. This column outlines the six key areas where regulatory reform is essential to preventing a repeat.

Enrico Perotti, Javier Suarez, 11 February 2009

Most financial system reform proposals rely on better managed, anti-cyclical capital requirements, or some sort of insurance. This column argues that mandatory liquidity insurance would be more effective. The insurance premiums – linked to maturity mismatch and term structure – would essentially be pre-payment for the cost of future financial crises and held in an Emergency Liquidity Insurance Fund.

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