Financial Regulation in the European Union After the Crisis: a Minskian approach

Minsky's institutional analysis of the development of the economy and how financial regulation fits in it -- Recent proposals of change in financial regulation inspired by Minsky -- Basel III : the revised capital requirements, the leverage ratio, and total loss absorbing capacity -- Two additional regulatory metrics : the liquidity coverage ratio and the net stable funding ratio -- Main consequences of the interaction between new regulatory rules (risk weighted capital requirements, leverage ratio, liquidity ratio, net stable funding ratio) and the new mandatory resolution regime for banks -- Financial fragility in the European crisis : three episodes -- Deleveraging in European banking and financial stability 2010-13 -- Italy's banking crisis -- Index

Cover -- Title -- Copyright -- Contents -- List of figures and tables -- List of abbreviations -- Part 1 Changes in financial regulation in the European Union: a critical analysis -- 1 Minsky on the institutional development of the economy -- Introduction -- The system's endogeneous dynamics versus institutions and interventions -- Financial innovation as bricolage -- Minsky on money manager capitalism, finance and thwarting systems -- Conclusions -- 2 Minsky on central banking and the current debate -- Introduction -- Recent proposals of change in financial regulation inspired by Minsky -- A proposal to constrain the growth rate of banks' assets -- Criticism of that proposal as a unique solution to the problem of financial instability -- The central bank as a dealer of last resort or as a guide to the financial system? -- Minsky's theory of central banking: the central bank as a guide to the financial system -- The central bank as a dealer of last resort for ever? -- Which regulatory changes should be pursued in order to enhance stability and avoid cumulative processes? -- Conclusions -- 3 Main changes in regulation after the crisis -- Introduction -- The revised capital requirements: just a change in the weights? -- How the revision in capital requirements works in practice -- Other macroprudential measures -- The leverage ratio -- The definition of leverage ratio and how to calculate it -- Too much hope in this new tool? -- Total loss-absorbing capacity in the EU -- Conclusions -- 4 Liquidity coverage and net stable funding ratios -- Introduction -- The liquidity coverage ratio -- How to calculate the numerator of the ratio -- How to calculate the denominator of the ratio -- Conclusions about the theoretical underpinnings of the ratio