Suchergebnisse

We can end to 'too big to fail.' We can make banks "safe to fail," so that investors, not taxpayers, bear the cost of bank failures, whilst minimising disruption to financial markets and the economy as a whole. In this new book, Thomas Huertas, author of Crisis: Cause, Containment and Cure provides a rigorous, yet accessible and engaging account of how we can make banks 'safe to fail' as well as how reform of resolution will revolutionize banking. The book focuses on systemically important financial institutions (G-SIFIs). Although these institutions play a vital role in fostering economic growth and development, G-SIFIs should not be too big to fail. That policy is too costly to continue. The book analyses efforts to make banks less likely to fail by strengthening regulation and sharpening supervision. It then provides a practical guide to making banks resolvable, or "safe to fail". Bail-in, not bail out, holds the key. That will recapitalize the failed bank and set the stage for the bank to continue to perform critical economic functions. But putting investors clearly at risk will challenge banks. The book outlines what banks should do in response, if they are to succeed in the new environment

Crisis: Cause, Containment and Cure explains how the global financial crisis of 2007 to 2009 came about, how it is being contained and what steps should be taken to prevent such a crisis from happening again. Written by the Director of the Banking Sector at the Financial Services Authority, it gives a first-hand view of policy making combined with rigorous economic analysis presented in an easily readable style. It is analytical - not anecdotal - based on up-to-date economic theory and recent policy pronouncements, including both macroeconomic and financial sector aspects. There are numerous books on the crisis but few which have the breadth, analytical rigour and first-hand experience of policy-making offered here by Dr. Huertas. Enhanced with diagrams to illustrate key concepts, this book will be a valuable resource for banks, central banks, public policy makers, banking regulators, law firms, securities associations, finance ministries, students of banking, finance and monetary economics and indeed anyone who seeks a balanced, comprehensive, global authoritative view of the crisis.

The crisis management and deposit insurance (CMDI) framework in the euro area requires a reset. Although its policy objectives remain valid, the means of achieving them do not. As the euro area comes the end of the long transition period taken to implement the BRRD/SRMR, it should take the opportunity to reset expectations about resolution. Above all, resolution should be for the many, not just the few. There should be a single presumptive path for dealing with failed banks: the use of bail-in to facilitate orderly liquidation under a solvent-wind down strategy. This will protect deposits and set the stage – together with the backstop that the European Stability Mechanism provides to the Single Resolution Fund (SRF) -- for the transformation of the SRF into the Single Deposit Guarantee Scheme (SDGS). To avoid forbearance, responsibility for emergency liquidity assistance (ELA) should rest, not with national central banks, but with the ECB as a single lender of last resort. Finally, national deposit guarantee schemes should function as institutional protection schemes and become investors of last resort in their member banks. Together, these measures would complete Banking Union, promote market discipline, avoid imposing additional burdens on taxpayers, help untie the doom loop between weak banks and weak governments, strengthen the euro and enhance financial stability.

The crisis management and deposit insurance (CMDI) framework in the euro area requires a reset. Although its policy objectives remain valid, the means of achieving them do not. As the euro area comes the end of the long transition period taken to implement the BRRD/SRMR, it should take the opportunity to reset expectations about resolution. Above all, resolution should be for the many, not just the few. There should be a single presumptive path for dealing with failed banks: the use of bail-in to facilitate orderly liquidation under a solvent-wind down strategy. This will protect deposits and set the stage - together with the backstop that the European Stability Mechanism provides to the Single Resolution Fund (SRF) -- for the transformation of the SRF into the Single Deposit Guarantee Scheme (SDGS). To avoid forbearance, responsibility for emergency liquidity assistance (ELA) should rest, not with national central banks, but with the ECB as a single lender of last resort. Finally, national deposit guarantee schemes should function as institutional protection schemes and become investors of last resort in their member banks. Together, these measures would complete Banking Union, promote market discipline, avoid imposing additional burdens on taxpayers, help untie the doom loop between weak banks and weak governments, strengthen the euro and enhance financial stability.

To complete banking union, there should be a single European deposit insurance scheme (EDIS) alongside the single supervisor and the single resolution authority. This would ensure uniformity across the Eurozone and facilitate the removal of barriers to the mobility of liquidity and capital within the single market. That in turn would promote efficiency in the banking sector and in the economy at large - just at the time that the EU needs to boost growth in order to remain competitive with the US and China. The EDIS promise to promptly reimburse insured deposits at a failed bank in the Eurozone should be unconditional. But who will stand behind that commitment? Who is the "E" in EDIS? Is its promise credible, even in a crisis? If a deposit guarantee scheme fails to deliver what people expect, panic would very likely erupt. Instead of strengthening financial stability, deposit insurance could destroy it. Yet this is the risk that current proposals pose. They create the impression that there will be a single deposit guarantee scheme. There will not. Instead, there will be a complex set of liquidity and reinsurance arrangements among Member State schemes. These defects need to be remedied. To do so, we propose creating a European Deposit Insurance Corporation (EDIC) alongside national schemes. For banks that meet EDIC's strict entry criteria and decide to become members, EDIC will promise to reimburse promptly - in the event the member bank fails - 100 cents on the euro in euro for each euro of insured deposits, regardless of the Eurozone Member State in which the bank is headquartered. In effect, the single deposit guarantee scheme would be created via migration to EDIC rather than mutualisation of existing schemes. This would increase the mobility of capital and liquidity and lead to a convergence of interest rates across the Eurozone. That in turn will improve the effectiveness of monetary policy, foster integration and promote growth.

To complete banking union, there should be a single European deposit insurance scheme (EDIS) alongside the single supervisor and the single resolution authority. This would ensure uniformity across the Eurozone and facilitate the removal of barriers to the mobility of liquidity and capital within the single market. That in turn would promote efficiency in the banking sector and in the economy at large — just at the time that the EU needs to boost growth in order to remain competitive with the US and China. The EDIS promise to promptly reimburse insured deposits at a failed bank in the Eurozone should be unconditional. But who will stand behind that commitment? Who is the "E" in EDIS? Is its promise credible, even in a crisis? If a deposit guarantee scheme fails to deliver what people expect, panic would very likely erupt. Instead of strengthening financial stability, deposit insurance could destroy it. Yet this is the risk that current proposals pose. They create the impression that there will be a single deposit guarantee scheme. There will not. Instead, there will be a complex set of liquidity and reinsurance arrangements among Member State schemes. These defects need to be remedied. To do so, we propose creating a European Deposit Insurance Corporation (EDIC) alongside national schemes. For banks that meet EDIC's strict entry criteria and decide to become members, EDIC will promise to reimburse promptly — in the event the member bank fails — 100 cents on the euro in euro for each euro of insured deposits, regardless of the Eurozone Member State in which the bank is headquartered. In effect, the single deposit guarantee scheme would be created via migration to EDIC rather than mutualisation of existing schemes. This would increase the mobility of capital and liquidity and lead to a convergence of interest rates across the Eurozone. That in turn will improve the effectiveness of monetary policy, foster integration and promote growth.

The South's failure to industrialize more rapidly in the antebellum period did not lead to its immiserization. The South's terms of trade improved over the antebellum period so that its consumption potential expanded more rapidly than did production. Specialization in cotton production promoted a favorable movement of relative prices facing Southern producers. A customs union analysis shows that the South might have industrialized to a greater extent and might have raised its consumption potential further had it been able to impose an independent tariff on imports from all areas, including the rest of the United States.