Russell Cooper, Hubert Kempf, 18 February 2011

Before the surprising 2007 collapse of Northern Rock, it was taken for granted that bank runs were things of the past. But their return and the modifications of deposit insurance schemes lead many to question the credibility of the government’s commitment. What makes a run on a bank? And when should the government intervene? This column provides some answers.

Anna Pavlova, Roberto Rigobon, 15 February 2011

International macro-finance is a new area of open economy macroeconomics that brings portfolio choice and asset pricing considerations into models of international macroeconomics. This column argues that the recent global crisis illustrates just how important these considerations are. It surveys recent developments in international macro-finance and suggests several promising directions for future research.

Ralph De Haas, Neeltje van Horen, 13 February 2011

Cross-border bank lending fell dramatically during the global crisis, but lending to some countries declined far more severely than to others. Recreating the monthly lending flows of the 118 largest international banks, this column finds that banks with head offices farther away from their customers are less reliable funding sources during a crisis, suggesting that the nationality of foreign banks matters.

Donato Masciandaro, María Nieto, Marc Quintyn, 07 February 2011

The European Banking Authority was established on 1 January 2011 with the chief objective of ensuring common regulatory and supervisory standards across the EU. This column asks whether it can achieve this objective under its current governance objectives. It suggests that he European Banking Authority is at least in part restricted in its ability to function.

Carlos Tavares, 12 January 2011

Some argue that the widening spreads between sovereign debt in Germany and that of other European countries have been exacerbated by activity in the market for credit default swaps. This column argues that “naked credit default swaps” are of a different nature to naked short selling and deserve to be treated so. It explores insights from the academic literature, market participants, and securities regulators.

Carlos Tavares, 09 January 2011

With the economic crisis mutating, now is the hour of the regulator. This column argues that policymakers should take heed; the opacity of over-the-counter trading should come to an end and regulation and transparency should be extended to all corners of the financial sector.

Biagio Bossone, 18 December 2010

How do banks and capital markets interact? This column brings together evidence to show that banks and capital markets, rather than simply being competitors, are in fact complements to each other – a finding that has implications for policy.

Fenghua Song, Anjan Thakor, 01 December 2010

Banks and capital markets are often viewed as competitors within the financial system, with some suggesting that each develops at the expense of the other. This column argues that banks and markets exhibit three forms of interaction. They compete, they complement each other, and they coevolve.

Olivier Jeanne, Anton Korinek, 28 November 2010

The damage caused by the global crisis and fiscal crises in several developed countries has rejuvenated support for regulation and has reignited research interest. This column presents one recent proposal: A Pigouvian tax to help bring the amount of debt and capital held by the financial sector closer to the socially optimal level.

Nicolas Véron, 19 November 2010

The endorsement of the Basel III accord on financial regulation at the recent G20 meetings in Seoul represents one of the event’s main outcomes. This column argues that while this initiative should be welcomed, global finance cannot realistically be submitted to a single rulebook and significant challenges remain.

Ernesto Zedillo, 18 November 2010

How should we judge the 2010 Seoul G20 meeting? A failure, according to this column. It argues that the G20’s failure to coordinate economic policies puts the global economy at risk and that there is little in the G20 Seoul Action Plan addressing the tensions that preceded the summit.

Priya Nandita Pooran, 14 November 2010

Will the US Dodd-Frank Act work? This column argues that unless institutional oversight shifts from the current fragmented structure to a federal one, the Dodd-Frank reforms could be prevented from having any significant positive effect on the surveillance of the financial system.

The Editors, 09 November 2010

In preparation for this week’s meeting of the G20, CEPR recently held a major conference on financial regulation – The Future of Regulatory Reform – bringing together senior policymakers, leading academics and industry practitioners. This column presents a report and video highlighting some of the speakers’ key recommendations.

Giuseppe De Martino, Massimo Libertucci, Mario Marangoni, Mario Quagliariello, 30 October 2010

Contingent capital requirements may reduce the problems of low-quality bank capital and excessively leveraged institutions, but they also risk being too complex. This column aims to strike an appropriate balance by presenting a proposal based on both macroeconomic and bank-level triggers for debt-to-equity conversion. It assesses how such a rule would have performed in identifying stressed banks in recent years.

Amar Bhidé, 29 October 2010

Amar Bhidé of Tufts University talks to Romesh Vaitilingam about his new book, ‘A Call for Judgement: Sensible Finance for a Dynamic Economy’, which explains how bad academic theories and mis-regulation have caused a dangerous divergence between the financial sector and the real economy. He calls for a return to case-by-case judgment in financial transactions, with deposit-taking institutions limited to basic lending. The interview was recorded in London in October 2010. [Also read the transcript]

Nicolas Véron, 26 October 2010

For whom is the financial crisis over? This column argues that the US response has been far more effective at reassuring investors than that in Europe. It says that stress tests have failed to trigger the needed recapitalisation and restructuring of Europe’s troubled banks. Europe’s leaders, it argues, must tackle these problems head-on.

Viral Acharya, Thomas Cooley, Matthew Richardson , Richard Sylla, Ingo Walter, 24 November 2010

Of the recent reforms to make financial systems more robust, the US Dodd-Frank Wall Street Reform and Consumer Protection Act stands out. Despite being broadly in favour of its proposals, this column identifies flaws in its design that fail to deal with the main causes of the crisis and that will lead to further implicit government guarantees.

Dirk Schoenmaker, 18 October 2010

The financial crisis has shown that countries put national interests first. On the banking side, the handling of Fortis, Lehman and the Icelandic banks are clear examples of coordination failure. On the sovereign side, the Greek saga illustrates the damage of ad hoc attempts to coordinate. This column explores how burden sharing can be made to work in practice.

Enrico Perotti, 13 October 2010

CEPR Policy Insight No.52 highlights how the 2005 bankruptcy changes created a negative externality for all intermediaries in liquidity runs, the leading cause of shock propagation in the credit crisis

Enrico Perotti, 13 October 2010

How did the bank-funding system get so fragile to mletdown and lead to the worst crisis since WWII? In a new CEPR Policy Insight, Enrico Perotti argues that an important part of the answer lies in the bankruptcy privileges granted in 2005 to overnight secured credit and derivatives by the US authorities. These privileges made such lending safe for the lenders and thus cheap for the borrowers. The result was fantastic growth in this market to the detriment of stability.

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