This Finance survey examines (a) Research on the nature and impact of bank runs has made it possible to limit substantially the wider economic damage from financial crises; (b) Reforms of financial regulation since 2008 (and macroprudential policies in some countries) will not substantially reduce the probability of financial crises
Keyword: financial crises
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This European survey examines (a) Research on the nature and impact of bank runs has made it possible to limit substantially the wider economic damage from financial crises; (b) Reforms of financial regulation since 2008 (and macroprudential policies in some countries) will not substantially reduce the probability of financial crises.
This US survey examines (a) Research on the nature and impact of bank runs has made it possible to limit substantially the wider economic damage from financial crises; (b) Reforms of financial regulation since 2008 (and macroprudential policies in some countries) will not substantially reduce the probability of financial crises
This Finance survey examines (a) The costs and risks associated with a sharp fall in the value of sterling outweigh any macroeconomic benefits for the UK of export stimulus due to a weaker currency; (b) Concerns about government finances and debt sustainability can undermine the reserve currency status of a major currency
This week’s IGM European Economic Experts Panel statements:
A) Breaking the “doom loop” — a negative spiral that can result when banks hold sovereign bonds and governments bail out banks — would increase the stability of European economies in the event of another financial crisis.
B) Regulators should try to break the doom loop by assigning positive risk weights — in calculating banks’ capital requirements — to banks’ holdings of domestic and other Eurozone sovereign bonds.
C) Breaking the doom loop would impose substantial costs on powerful political constituencies.
This week’s IGM European Economic Experts Panel statements:
A common European deposit insurance scheme, once fully implemented, would increase the stability of European economies in the event of another financial crisis.
A common European deposit insurance scheme, once fully implemented, would increase the likelihood of another financial crisis in Europe.
This week's IGM Economic Experts Panel statement:
The ratio of the 90th to the 10th percentile of the US income distribution has been unaffected by the Federal Reserve’s unconventional monetary policies since the financial crisis.
This week's IGM Economic Experts Panel statements:
The four largest domestic US banks currently have around 40% of the industry’s domestic assets (an average of 10% each). In early 1998, before Glass-Steagall ended and before Citicorp merged with Travelers, they held 13.2% (an average of 3.3% each). Thirty years ago, before interstate branching was fully permitted, that combined share was around 8% (an average of 2% each).
A) Capping US banks’ size so that no single bank could be larger than 4% of the sector's domestic assets would lower systemic risk in the US.
B) The US financial system would contribute more to the average American’s welfare if the size of US banks were capped so that none could be larger than 4% of the sector's domestic assets.
This week’s IGM Economic Experts Panel statement:
In 10 years, per capita purchasing power in Greece will be higher if — rather than continuing to service its debts over the next decade and complying with the budget rules currently in place — it refuses to accept a continuation of its current troika program and explicitly defaults on its debt held by the official sector.
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