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612-822-4611
Commentary

Commentary

Hardcover

AccountingInvesting & FinanceGeneral Law

ISBN10: 1025081021
ISBN13: 9781025081021
Publisher: Hutson Street Press
Published: May 22 2025
Pages: 20
Weight: 0.47
Height: 0.25 Width: 6.14 Depth: 9.21
Language: English

The article puts forward the view that the regulatory perspective on systemic risk should be changed drastically. The sub-prime crisis has indeed revealed many loopholes in the supervisory/regulatory framework for banks-in particular, the inability to deal with the too-big-to-fail syndrome and also the lack of resiliency of interbank and money markets. To a large extent, the contagion phenomena that took place in these markets were the necessary outcomes of the passive attitude of banking supervisors, who have let large banks develop a complex and opaque nexus of bilateral obligations. We propose two reforms: adopting a platform-based (instead of institutionbased) regulatory perspective on systemic risk and encouraging a generalized move to central counterparty clearing.

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