Xavier Vives, 17 March 2015

The 2007–08 crisis revealed regulatory failures that had allowed the shadow banking system and systemic risk to grow unchecked. This column evaluates recent proposals to reform the banking industry. Although appropriate pricing of risk should make activity restrictions redundant, there may nevertheless be complementarities between these two approaches. Ring-fencing may make banking groups more easily resolvable and therefore lower the cost of imposing market discipline.

Augustin Landier, Kenichi Ueda, 25 July 2009

Bank restructuring is a source of disagreement on both sides of the Atlantic, and no clearly preferred policy approach has emerged. This column compares the costs to taxpayers of using recapitalisation, asset guarantees, and asset sales. In many circumstances, asset sales are an inferior tool.

Javier Suarez, 13 October 2008

Government guarantees are no substitute for supervision – they are a complement. Free from short-term liquidity pressures, supervisors should focus on banks’ long-term prospects and limit their behaviour or encourage restructuring as needed.

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