Michael Chui and Prasanna Gai
- Published in print:
- 2005
- Published Online:
- July 2005
- ISBN:
- 9780199267750
- eISBN:
- 9780191602504
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199267758.001.0001
- Subject:
- Economics and Finance, Financial Economics
This book offers an analytical perspective on the policy debate on the design and reform of the international financial architecture. It stresses the role played by coordination problems in the ...
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This book offers an analytical perspective on the policy debate on the design and reform of the international financial architecture. It stresses the role played by coordination problems in the origin and management of crises by relating the insights of the new literature on global games to earlier work on currency crises, bank runs, and sovereign debt default. It draws on recent research and policy work to examine the debate on the design of sovereign bankruptcy procedures, the role of the IMF in influencing the actions of creditors and debtors, and the role of private sector involvement in the management of financial crises.Less
This book offers an analytical perspective on the policy debate on the design and reform of the international financial architecture. It stresses the role played by coordination problems in the origin and management of crises by relating the insights of the new literature on global games to earlier work on currency crises, bank runs, and sovereign debt default. It draws on recent research and policy work to examine the debate on the design of sovereign bankruptcy procedures, the role of the IMF in influencing the actions of creditors and debtors, and the role of private sector involvement in the management of financial crises.
Jean Tirole
- Published in print:
- 2010
- Published Online:
- October 2017
- ISBN:
- 9780691145235
- eISBN:
- 9781400834648
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691145235.003.0002
- Subject:
- Business and Management, Finance, Accounting, and Banking
This chapter aims to contribute to the debate on financial system reform. The first part describes what is perceived to be a massive regulatory failure, a breakdown that goes all the way from ...
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This chapter aims to contribute to the debate on financial system reform. The first part describes what is perceived to be a massive regulatory failure, a breakdown that goes all the way from regulatory fundamentals to prudential implementation. The second part discusses some implications of recent events for financial sector regulation. It argues that to avoid a repetition of the financial crisis, we need both to change public policies that contributed to the crisis (particularly the mortgage crisis) and to institute financial reforms. Desirable reforms of public policy regarding real estate lending include promoting consumer protection and reducing subsidies. Financial regulation must also be international. The creation of supranational regulatory structures has become increasingly urgent in a world in which institutions and counterparties are truly international.Less
This chapter aims to contribute to the debate on financial system reform. The first part describes what is perceived to be a massive regulatory failure, a breakdown that goes all the way from regulatory fundamentals to prudential implementation. The second part discusses some implications of recent events for financial sector regulation. It argues that to avoid a repetition of the financial crisis, we need both to change public policies that contributed to the crisis (particularly the mortgage crisis) and to institute financial reforms. Desirable reforms of public policy regarding real estate lending include promoting consumer protection and reducing subsidies. Financial regulation must also be international. The creation of supranational regulatory structures has become increasingly urgent in a world in which institutions and counterparties are truly international.
Barry Eichengreen
- Published in print:
- 2002
- Published Online:
- October 2011
- ISBN:
- 9780199257430
- eISBN:
- 9780191698453
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199257430.001.0001
- Subject:
- Economics and Finance, Financial Economics
This book provides a critical assessment of the official sector's efforts to manage more effectively financial crises in emerging markets. The book reviews international initiatives on both the ...
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This book provides a critical assessment of the official sector's efforts to manage more effectively financial crises in emerging markets. The book reviews international initiatives on both the crisis prevention and crisis resolution fronts. While crises will always be with us, it concludes that good progress has been made in limiting their spread and strengthening the international financial system. Ironically, however, official sector initiatives in this area may in fact have made life more difficult for the poorest countries. Initiatives to limit the incidence of crises and threats to the stability of the international financial system should therefore be linked to an increase in development assistance designed to offset the extra burdens on the poorest countries. The other place where official efforts have fallen short is in creating new ways of resolving crises. The book argues that the old way — the official sector financing through the International Monetary Fund — is part of the problem, not part of the solution.Less
This book provides a critical assessment of the official sector's efforts to manage more effectively financial crises in emerging markets. The book reviews international initiatives on both the crisis prevention and crisis resolution fronts. While crises will always be with us, it concludes that good progress has been made in limiting their spread and strengthening the international financial system. Ironically, however, official sector initiatives in this area may in fact have made life more difficult for the poorest countries. Initiatives to limit the incidence of crises and threats to the stability of the international financial system should therefore be linked to an increase in development assistance designed to offset the extra burdens on the poorest countries. The other place where official efforts have fallen short is in creating new ways of resolving crises. The book argues that the old way — the official sector financing through the International Monetary Fund — is part of the problem, not part of the solution.
López Ramón and Michael A. Toman
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199298006
- eISBN:
- 9780191603877
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199298009.003.0004
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter discusses relationships between the macro economy and economic policy, and the environmental and resource situation in developing countries. It focuses on the distortive effects of ...
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This chapter discusses relationships between the macro economy and economic policy, and the environmental and resource situation in developing countries. It focuses on the distortive effects of energy and resource subsidies, poorly managed monetary policy leading to exchange rate instability and high interest rates, and financial crises which often lead to too shortsighted policies and behavior regarding the management of environment and resources.Less
This chapter discusses relationships between the macro economy and economic policy, and the environmental and resource situation in developing countries. It focuses on the distortive effects of energy and resource subsidies, poorly managed monetary policy leading to exchange rate instability and high interest rates, and financial crises which often lead to too shortsighted policies and behavior regarding the management of environment and resources.
Laurence Whitehead
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199253289
- eISBN:
- 9780191600326
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199253285.003.0007
- Subject:
- Political Science, Democratization
Explores the relationship between processes of democratization and the establishment and/or reinforcement of trustworthy and credible systems of monetary authority, with particular emphasis on ...
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Explores the relationship between processes of democratization and the establishment and/or reinforcement of trustworthy and credible systems of monetary authority, with particular emphasis on central banks. The theoretical issues it considers include the ‘delicate balance’ between monetary authority and democratic legitimacy, the underlying rationale for central bank independence, and the scope and limits of ‘consent’ in monetary affairs. But this chapter is equally concerned with the feedback from experience to theory, focusing in particular on the way that unanticipated financial crises may inflict heavy redistributive costs on society, and may even weaken the legitimacy of fledgling democratic institutions.Less
Explores the relationship between processes of democratization and the establishment and/or reinforcement of trustworthy and credible systems of monetary authority, with particular emphasis on central banks. The theoretical issues it considers include the ‘delicate balance’ between monetary authority and democratic legitimacy, the underlying rationale for central bank independence, and the scope and limits of ‘consent’ in monetary affairs. But this chapter is equally concerned with the feedback from experience to theory, focusing in particular on the way that unanticipated financial crises may inflict heavy redistributive costs on society, and may even weaken the legitimacy of fledgling democratic institutions.
Louis W. Pauly
- Published in print:
- 2009
- Published Online:
- September 2009
- ISBN:
- 9780199557431
- eISBN:
- 9780191721687
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199557431.003.0002
- Subject:
- Business and Management, Political Economy, Finance, Accounting, and Banking
In the wake of several financial crises that also now spanned national boundaries, pragmatic financial supervisors gradually built a workable regime around the principle of ‘home-country control’ — ...
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In the wake of several financial crises that also now spanned national boundaries, pragmatic financial supervisors gradually built a workable regime around the principle of ‘home-country control’ — the government ultimately responsible for any particular coordinated response necessary to stabilize an interdependent system was the government of the state within which a troubled institution was licensed and clearly based. A truly integrated pan-European market, however, just as a truly global market, pushes such a regime past its limit. In fact, it is already the case that the emergence of certain large, complex financial institutions in Europe blurs the identity of the responsible government and opens the policy space for new supervisory approaches and common agreement on burden sharing. In principle and in extremis, that space can only be filled with an understanding involving the fundamental commitment of fiscal resources, and by the sharing of such a commitment by national authorities. For various reasons, the extent of that commitment may have to remain implicit, but it will only be plausible if credible structures are in place to coordinate responses in the event of emergency. The difficulty in putting these crisis prevention and crisis management arrangements in place exposes the political dilemma at the heart of the financial integration project, both in Europe and more broadly. Finance respects fewer frontiers, but fiscal politics remains geographically bounded. This chapter sets out the conceptual and historical context for understanding that dilemma, and in this light examines the contemporary evolution of policy responses.Less
In the wake of several financial crises that also now spanned national boundaries, pragmatic financial supervisors gradually built a workable regime around the principle of ‘home-country control’ — the government ultimately responsible for any particular coordinated response necessary to stabilize an interdependent system was the government of the state within which a troubled institution was licensed and clearly based. A truly integrated pan-European market, however, just as a truly global market, pushes such a regime past its limit. In fact, it is already the case that the emergence of certain large, complex financial institutions in Europe blurs the identity of the responsible government and opens the policy space for new supervisory approaches and common agreement on burden sharing. In principle and in extremis, that space can only be filled with an understanding involving the fundamental commitment of fiscal resources, and by the sharing of such a commitment by national authorities. For various reasons, the extent of that commitment may have to remain implicit, but it will only be plausible if credible structures are in place to coordinate responses in the event of emergency. The difficulty in putting these crisis prevention and crisis management arrangements in place exposes the political dilemma at the heart of the financial integration project, both in Europe and more broadly. Finance respects fewer frontiers, but fiscal politics remains geographically bounded. This chapter sets out the conceptual and historical context for understanding that dilemma, and in this light examines the contemporary evolution of policy responses.
Thomas H. Stanton
- Published in print:
- 2012
- Published Online:
- September 2012
- ISBN:
- 9780199915996
- eISBN:
- 9780199950324
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199915996.001.0001
- Subject:
- Economics and Finance, Financial Economics
Why did some firms weather the financial crisis and others not? This book builds on interviews and access to internal documents from over a dozen major financial companies, investigates their ...
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Why did some firms weather the financial crisis and others not? This book builds on interviews and access to internal documents from over a dozen major financial companies, investigates their workings, reveals what went wrong, and discovers a remedy. A critical difference between successful and unsuccessful firms is a culture that encourages respectful challenge, what the book calls “constructive dialogue.” At successful firms top management engaged in constructive dialogue with the board, a strong management team, and the chief risk officer, among others, in making a decision; firms that failed often featured overbearing (or distracted) CEOs or unit heads, supine boards, incapable management, ineffective risk officers, and poor communications both across silos and up the hierarchy. They often lacked ability to manage the firm as an integrated organization. Companies need good management, and not only good risk management, to stay out of trouble. Successful companies operated with strong information systems and a culture of good communications that brought issues promptly to top management so the company could adjust its operations accordingly. Regulators should use constructive dialogue as a test of good management and require evidence that major business decisions result from a robust process rather than merely the will of powerful CEOs or heads of revenue-producing units. Companies should use their regulator as a potential source of useful feedback. The book concludes by looking at major firms in other industries and finds that its conclusions apply to these companies too.Less
Why did some firms weather the financial crisis and others not? This book builds on interviews and access to internal documents from over a dozen major financial companies, investigates their workings, reveals what went wrong, and discovers a remedy. A critical difference between successful and unsuccessful firms is a culture that encourages respectful challenge, what the book calls “constructive dialogue.” At successful firms top management engaged in constructive dialogue with the board, a strong management team, and the chief risk officer, among others, in making a decision; firms that failed often featured overbearing (or distracted) CEOs or unit heads, supine boards, incapable management, ineffective risk officers, and poor communications both across silos and up the hierarchy. They often lacked ability to manage the firm as an integrated organization. Companies need good management, and not only good risk management, to stay out of trouble. Successful companies operated with strong information systems and a culture of good communications that brought issues promptly to top management so the company could adjust its operations accordingly. Regulators should use constructive dialogue as a test of good management and require evidence that major business decisions result from a robust process rather than merely the will of powerful CEOs or heads of revenue-producing units. Companies should use their regulator as a potential source of useful feedback. The book concludes by looking at major firms in other industries and finds that its conclusions apply to these companies too.
Jean-Charles Rochet
- Published in print:
- 2010
- Published Online:
- October 2017
- ISBN:
- 9780691145235
- eISBN:
- 9781400834648
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691145235.003.0003
- Subject:
- Business and Management, Finance, Accounting, and Banking
This chapter takes a more detailed look at the flaws in the prudential framework that was in place when the crisis erupted and at the required remedies. It begins by discussing the Basel Accords and ...
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This chapter takes a more detailed look at the flaws in the prudential framework that was in place when the crisis erupted and at the required remedies. It begins by discussing the Basel Accords and the breakdown of the Basel prudential regime. It then explains the necessary reforms. It argues that three types of reforms are necessary: (1) a much more powerful and independent banking supervisor; (2) much simpler, and easier to apply, prudential regulation; and (3) the installation of a prompt corrective action regime for the management of crises, including a special resolution regime for systematically important financial institutions.Less
This chapter takes a more detailed look at the flaws in the prudential framework that was in place when the crisis erupted and at the required remedies. It begins by discussing the Basel Accords and the breakdown of the Basel prudential regime. It then explains the necessary reforms. It argues that three types of reforms are necessary: (1) a much more powerful and independent banking supervisor; (2) much simpler, and easier to apply, prudential regulation; and (3) the installation of a prompt corrective action regime for the management of crises, including a special resolution regime for systematically important financial institutions.
Jong‐Il You
- Published in print:
- 2006
- Published Online:
- May 2007
- ISBN:
- 9780195189322
- eISBN:
- 9780199783823
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195189322.003.0007
- Subject:
- Economics and Finance, International
This chapter reviews Korea's experience with economic liberalization since the early 1980s. Section 1 provides a brief history of the economic liberalization policy in the broader context of the rise ...
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This chapter reviews Korea's experience with economic liberalization since the early 1980s. Section 1 provides a brief history of the economic liberalization policy in the broader context of the rise and fall of the Korean model of development. Section 2 analyzes the major economic consequences of the liberalization policy, including its impact on growth and distribution, the currency crisis, and the financial crisis. Section 3 examines the macroeconomic adjustments since the crisis, including the impact on the labor market and income distribution. Section 4 reviews the economic and social policy reforms that the government has pursued since the crisis. The concluding section draws some lessons on liberalization policy from the Korean experience.Less
This chapter reviews Korea's experience with economic liberalization since the early 1980s. Section 1 provides a brief history of the economic liberalization policy in the broader context of the rise and fall of the Korean model of development. Section 2 analyzes the major economic consequences of the liberalization policy, including its impact on growth and distribution, the currency crisis, and the financial crisis. Section 3 examines the macroeconomic adjustments since the crisis, including the impact on the labor market and income distribution. Section 4 reviews the economic and social policy reforms that the government has pursued since the crisis. The concluding section draws some lessons on liberalization policy from the Korean experience.
Charles H. Feinstein, Peter Temin, and Gianni Toniolo
- Published in print:
- 2008
- Published Online:
- May 2008
- ISBN:
- 9780195307559
- eISBN:
- 9780199867929
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195307559.001.0001
- Subject:
- Economics and Finance, Economic History
This book surveys the main events in the international economy from the outbreak of the First World War to the end of the Second World War: a period of time variously defined as the “globalization ...
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This book surveys the main events in the international economy from the outbreak of the First World War to the end of the Second World War: a period of time variously defined as the “globalization backlash”, the “Second Thirty Years War”, or simply “the World in Depression”. The book starts with the unfortunate peace settlement after the First World War and progresses to the ensuing hyperinflations and financial crises; from the attempts at rebuilding an international economic and monetary order in the face of rapid technical progress and productivity growth to the policy mistakes that brought about the Great Depression — the most devastating economic depression in human history; from wide-spread long-term unemployment to overall autarky and a second global conflagration. The opening chapter puts the interwar years in the long-term quantitative perspective of economic development over the whole of the 20th century while the final chapter highlights the long-run impact of the interwar years on the growth and policy features of the prosperous decades that followed the end of the Second World War.Less
This book surveys the main events in the international economy from the outbreak of the First World War to the end of the Second World War: a period of time variously defined as the “globalization backlash”, the “Second Thirty Years War”, or simply “the World in Depression”. The book starts with the unfortunate peace settlement after the First World War and progresses to the ensuing hyperinflations and financial crises; from the attempts at rebuilding an international economic and monetary order in the face of rapid technical progress and productivity growth to the policy mistakes that brought about the Great Depression — the most devastating economic depression in human history; from wide-spread long-term unemployment to overall autarky and a second global conflagration. The opening chapter puts the interwar years in the long-term quantitative perspective of economic development over the whole of the 20th century while the final chapter highlights the long-run impact of the interwar years on the growth and policy features of the prosperous decades that followed the end of the Second World War.
