International Financial Instability

Acknowledgements

Preface

Contents

The following sections are included:

• Introduction

• Banking Developments in the European Union

• Regulatory Challenges

• Potential Solutions

• Another Approach

The following sections are included:

• Basel II and the Importance of an International Capital Standard

• The Importance of Establishing a Deposit Insurance System

• Coordination and Cooperation among Deposit Insurers

• Cross-Border Risks and Resolution Issues

• Concluding Remarks

The following sections are included:

• The Productivity Revolution

• The Savings Investment Imbalance

• Performance Management

• Illiquidity Seeking

• Tail Risk and Herding

• Risk Seeking

• Consequences

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The following sections are included:

• Introduction

• Measuring Cross-Border Banking

• Data on Cross-Border Banking

• Comparing Cross-Border Banking across the Continents

• Public Policy Issues

• Conclusions

• References

The following sections are included:

• Introduction and Conclusions

• Five Cross-Border Crisis Cases

• Near-Miss Cross-Border Crises

• What Causes Cross -Border Crises?

The following sections are included:

• Introduction

• Central Banks That Publish a FSR

• Which Factors Influence Publication of a FSR?

• The Content of the FSRs: A Comparison

• Relationship between Transparency and Financial Soundness

• Concluding Comments

• References

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The following sections are included:

• Introduction

• Why Cross-Border Banking?

• The Nordic Banking Structure

• The Nordic Banking Crises in the Early 1990s

• Potential Contagion Links under Nordic Cross-Border Banking

• Country Specific Bank Problems in a Subsidiary but Not Failure

• Severe Problems, but Not Failure in the Parent Bank

• Diversification : Branches versus Subsidiaries

• Country Specific Problems That Cause Failure of a Cross-Border Bank

• Concluding Remarks

• References

The following sections are included:

• Introduction

• Background

• Identifying Crises

• Models

• Data

• Summary of Results

• Conclusion

• References

The following sections are included:

• Introduction

• An Overview of the Hedge Fund Industry

• Performance and Risk of Hedge Funds

• Some Statistical Analyses

• Conclusions

• References

The following sections are included:

• Introduction

• Context and Background

• The Papers : Cross-Border Banking Groups

• FX and Other Global Markets

• Hedge Funds

The following sections are included:

• Introduction

• Sources and Nature of Systemic Risks

• Negative Externalities and Banking Failures

• Conflicts of Interest, Agency Costs, and Bankruptcy Laws: Their Role in Affecting the Negative Externalities of Banking Failures

• Summary and Conclusions

• References

The following sections are included:

• Home/Host Cooperation in Historical Perspective: The Concordat

• Harmonization Attempts: The Core Principles and Basel II

• Conflicts That May Arise with Regard to Weak or Insolvent Banks

• Asymmetries between Home and Host Supervisory Authorities

• Concluding Comment

• References

The following sections are included:

• Introduction

• What Types of Prudential Cross-Border Risks Do Nonbanks Pose?

• What are the Implications of the Fact That Regulation is Nationally Based?

• Is It Possible to Identify "Optimal" Patterns of Cross-Border Regulatory Cooperation?

• Concluding Comments: What Are the Constraints And Realities Governing What Cross-Border Collaboration Can Achieve?

The following sections are included:

• Trends in Global Banking

• Progress on Home-Host Issues

• Conclusion

The following sections are included:

• Introduction

• The Classical Lender of Last Resort Doctrine: Thornton and Bagehot

• The Classical Lender of Last Resort Doctrine and Monetary Policy Implementation Today

• Integration and Stability in the Single European Financial Market

• Conclusion

• References

The following sections are included:

• Background - Insolvency Principles

• International Complications

• The Division of Labor between Home and Host Countries

• Pre-Failure Crisis Management

• Crisis Resolution

• Future Directions?

The following sections are included:

• Introduction

• Bank Structure and Capital Allocation with Lead Supervision and Local Deposit Insurance

• Concerns for Host Regulators and the Role of Host Capital Supervision

• Tensions between Home and Host Regulator Suggested by the Model

• Conclusions: Implications for Cross-Border Supervision

• References

The following sections are included:

• Introduction

• Moral Hazard versus Bank Runs - Different Components of the Financial Safety Net

• Putting the Pieces Together - From Components to the Safety Net

• Complications in Cross-Border Banking

• Conclusions

• References

The following sections are included:

• Introduction

• The Case for Lex Specialis

• International Law Principles Governing Insolvency

• Cross-Border Bank Insolvency

• International Rules

• Regional Rules

• Bilateral Rules

• Concluding Observations

• References

The following sections are included:

• The Issue

• Too Big to Fail

• The Nature of the Intervention

• Who Should be Responsible?

• The Power to Act

• The Bridge Bank Approach

• Alternatives to the Bridge Bank Approach

• Handling the Various Parts of the Business

• The Cross-Border Issue

• References

The following sections are included:

• Conceptual Issues in Adopting PCA

• Institutional Preconditions for a Successful PCA

• Conclusions

• References

The following sections are included:

• Introduction

• The Authorities' Objectives in Bank Resolution

• The Financial Stability-Moral Hazard Trade-Off

• Constructive Ambiguity versus Transparency

• Avoidance of Insolvency

• Preserving a Large Bank 's Systemic Activities

• Exercise of Close-Out/Termination and Collateral Rights

• A Separate Regime for Bank Insolvency

• Resolving International Banks: Key Problems

• Resolving International Banks: Possible Solutions

The following sections are included:

• Introduction

• A Characterization of ECB and EU Arrangements

• Lender of Last Resort

• Are Current Arrangements Sustainable?

• What Should be Done?

• Concluding Thoughts

• References

The following sections are included:

• Introduction

• Evolving Character of Financial Intermediation

• The Way Forward

• Conclusions

• References

The following sections are included:

• OTC Derivatives and ISDA

• Implicit Financial Stability Efforts in Practice: Credit Derivatives

• Limits to Implicit Financial Stability Efforts: Credit Derivatives and Novations

• Conclusion

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The following sections are included:

• Introduction

• Cross Border Branches and Agencies

• Cross-Border Subsidiaries

• Umbrella Supervision

• Conclusion

Conference Agenda

Index