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.

Viral Acharya, Matthew Richardson, 07 February 2009

How did global finance become so fragile that a collection of bad mortgages in the US could bring the entire system to its knees and the global economy along with it? How can this fragility be eliminated? This column describes the answers provided in an important new book which has been written by a team of world-class scholars from NYU’s business school.

Donato Masciandaro, Marc Quintyn, 03 February 2009

Over the last ten years the financial supervision architecture and the role of the central bank in supervision therein has undergone radical transformation. A new CEPR Policy Insight addresses three questions. Which are the main features of the supervisory architecture reshaping? What explains the increasing diversity of the institutional settings? What are so far the effects of the changing face of banking and financial supervisory regimes on the quality of regulation and supervision?

Donato Masciandaro, Marc Quintyn, 03 February 2009

Central banks that have historically been involved in financial supervision often resist reforms that would unify supervisory powers in an agency other than the bank. This column argues that regulatory innovation is necessary to keep pace with financial innovation. Policymakers should be open to changes, including unification, and adopt reforms needed in their circumstances.

Hyun Song Shin, 31 January 2009

Today’s financial regulation is founded on the assumption that making each bank safe makes the system safe. This fallacy of composition goes a long way towards explaining how global finance became so fragile without sounding regulatory alarm bells. This column argues that mitigating the costs of financial crises necessitates taking a macroprudential perspective to complement the existing microprudential rules.

Luigi Spaventa, 28 January 2009

To fix the world financial system, the G20 needs to look at some bold institutional reforms. The column suggests an international financial stability charter backed up by an new institution that could either be ‘light’ with a slim secretariat, or more elaborate WTO-style organisation.

Luigi Zingales, 28 January 2009

In 1933, US securities regulations were introduced to restore trust in financial markets. Today, a new regulatory focus is needed to address the crisis of confidence. After reviewing the status of financial regulation, this column sketches policy proposals in three key areas of securities markets.

Charles Wyplosz, 27 January 2009

This column introduces the latest ICMB-CEPR Geneva Report – written this year by Markus Brunnermeier, Andrew Crockett, Charles Goodhart, Avinash Persaud, and Hyun Shin. The report discusses how world leaders should think about financial regulation reform, making a number of specific proposals.

The Editors, 02 July 2009

The latest ICMB/CEPR report discusses how world leaders should think about financial regulation reform, making a number of specific proposals.

Jon Danielsson, 05 January 2009

Much of today’s financial regulation assumes that risk can be accurately measured – that financial engineers, like civil engineers, can design safe products with sophisticated maths informed by historical estimates. But, as the crisis has shown, the laws of finance react to financial engineers’ creations, rendering risk calculations invalid. Regulators should rely on simpler methods.

Horst Siebert, 04 January 2009

This column argues that national governments ought to credibly commit themselves to not bailing out their banks if the worst comes. But it would be far from easy to do so.

Donato Masciandaro, 04 January 2009

Government guarantees for financial institutions that are "too big to fail" seem unavoidable, but such insurance against insolvency imposes major costs and may increase the risk of crisis. This column argues for the necessity of non-conventional regulatory solutions to make big banks pay for their implicit insurance. Progressive capital ratios may be one such solution.

Marco Pagano, 17 October 2008

EU leaders have agreed on a bail-out plan but much is still unknown about its details. How will governments act as equity shareholders? Who will deal with cross-border banks? This column discusses the need for a Euro-area bank supervisory authority, as financial integration has outpaced regulatory integration.

Charles Calomiris, 22 August 2008

The subprime crisis is the joint product of perverse incentives and historical flukes. This column explains why market actors made unrealistic assumptions about mortgage-backed securities and how various regulatory policies exacerbated the problem. The crisis will necessitate changes in monetary policy, regulation, and the structure of financial intermediation.

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