Laura Kodres, 15 October 2012

While financial reform is underway around the world, this column argues that much more needs to be done.

Donato Masciandaro, Marc Quintyn, 14 October 2012

Supervisory failures were key to the 2008 financial crisis. This column argues that supervisory governance has improved but that more is needed. The reforms should include a separation of macro- and micro-supervision since this allows for checks and balances that complement and strengthen governance.

Johan Hombert, Adrien Matray, 12 October 2012

Innovation is the heart of economic growth. This column presents evidence that the structure of a nation’s banking sector matters for innovation. The authors present evidence that when the banking market is very competitive and dominated by large banks, lenders are less able to fund innovation, as lending relationships can no longer be sustained.

Arnoud Boot, Lev Ratnovski, 08 October 2012

Liikanen, Vickers, and Volcker all question current banking-trading links. This column offers analytic scaffolding for thinking about the separation of banking and trading. Banking generates low risk returns from relationship-based activities; trading generates high-risk returns from short-term concentrated positions. The two are linked since trading allows banks to profit from the ‘spare’ banking capital, but deeper financial markets magnify problems of managing and regulating trading by banks.

Thorsten Beck, Tao Chen, Chen Lin, Frank Song, 02 October 2012

Even before the crisis, many economists warned that financial innovation has a dark side. This column uses new cross-country data on financial innovation and provides evidence that financial innovation can lead to more volatility, more fragility, and more severe losses. But it also finds evidence of improved growth opportunities, better financing, and increased R&D expenditure.

Jacopo Carmassi, Carmine Di Noia, Stefano Micossi, 20 September 2012

The European Commission’s latest proposals for financial regulation are seen by many as the first steps towards a banking union. This column argues that there are a number of issues that need to be exposed and debated in public before the Commission decides on anything.

Vincent O'Sullivan, Stephen Kinsella, 20 September 2012

The European Commission is planning a shake-up in financial supervision in Europe. This column argues that time will tell whether or not this is a good idea – for now all we have for certain is uncertainty.

Xavier Freixas, 01 September 2012

Before 2007, the widely accepted view was that systemic banks had to be bailed out no matter what. This column argues that views are changing – and for the better.

Giancarlo Spagnolo, 13 August 2012

How to save the banks but not the bankers? This column argues that fines for criminal behaviour in banks are not enough – it may be time to start locking people up.

Stefan W Schmitz, 28 July 2012

Those responsible for supervising the global financial system generally agree that international liquidity regulation must not only be harmonised, but also improved substantially. This column argues that any move towards dissolving this international consensus endangers financial stability in the EU.

Jihad Dagher, Ning Fu, 26 June 2012

Ever since the recent mortgage crisis, calls for tighter regulation on lenders have been widespread. But would stricter supervision and regulation of lenders have been any use during the frenzied optimism of a boom? This column argues that it might. It shows that lending by the loosely regulated non-bank companies was associated with higher foreclosure during the housing downturn when compared with lending by the more tightly regulated banks.

Jon Danielsson, Roger Laeven, Enrico Perotti, Mario Wüthrich, Rym Ayadi, Antoon Pelsser, 23 June 2012

October 2011 saw the latest draft of Solvency II, the European Union’s code for regulation of the insurance industry. This column argues that the latest proposals need to be drafted again, urgently.

Enrico Perotti, 16 January 2014

The ‘shadow banking’ sector is a loose title given to the financial sector that exists outside the regulatory perimeter but mimics some structures and functions of banks. This column introduces a new CEPR Policy Insight that looks into what we have learned about shadow banking since the Global Crisis.

Nicolas Véron, 04 May 2012

Europe’s finance ministers are currently deciding on the legislation intended to implement the Basel III international agreement on bank capital, leverage, liquidity, and risk management. This column argues that many officials, within Europe and beyond, severely underestimate the importance of this debate for reaching a global standard for financial regulation.

Charles Calomiris, Shekhar Aiyar, Tomasz Wieladek, 03 May 2012

How can governments limit excessive and unstable credit growth? Should they raise capital requirements for banks? This column looks at evidence from a policy experiment in the UK. It finds that UK-regulated banks did cut back on credit supply but that there was still ‘leakage’ from foreign banks.

Richard Portes, 30 April 2012

Once upon a time, credit default swaps were a form of insurance held by investors who also owned the underlying asset. But this column argues that the market has now become overwhelmed by ‘naked CDSs’ that allow speculators to make bets on the future of corporates and sovereigns – bets that can be wildly destabilising. This column calls for a ban on naked CDSs.

Ossi Leppänen, 18 April 2012

Since the start of the crisis the Eurosystem balance sheet has grown from €1200 billion in June 2007 to around €2900 billion in March 2012. But this is spread unevenly among different central banks within the Eurozone, raising the thorny issue of intra-area (TARGET) balances. This column argues that these balances signal a need for change and restructuring in the Eurozone banking sector.

Xavier Freixas, Christian Laux, 17 April 2012

Faith in market discipline has been shattered by the financial crisis. This column argues that the failure of market discipline has different roots. It points to a lack of transparency and efficiency, particularly when it is needed most. In order to rectify this, however, it is not enough to merely increase the provision and disclosure of information. Instead, transparency depends on how that information is interpreted and used.

Charles Goodhart, Wolf Wagner, 12 April 2012

"Don't put all your eggs in one basket" is standard financial advice. This column says that financial regulators are violating that principle. It argues that financial institutions have become too similar to each other, making financial crises more likely. It proposes a regulatory approach based on relative stock market correlations that would encourage greater diversity in the financial system.

Thorvaldur Gylfason, 11 April 2012

Most economists would agree that the global financial and economic crisis was at least partly caused by a failure in the regulation of the financial sector. While regulatory reform is now being debated throughout the world, critics argue that it is only a matter of time before any new regulations are removed by powerful interest groups. This column asks whether prompt corrective action belongs in constitutions.

Pages

Events

CEPR Policy Research