Latest analysis on financial risks

 

 

On February 8th 2015, from SoberLook: Improvements in the euro area credit conditions should not be ignored

 

Abstract: While there is almost no coverage of this topic in the financial media and the blogosphere, credit conditions in the Eurozone are showing marked improvements. This is an unpopular view these days, but ignoring the trend results in an incomplete view of the area's economy and markets. Here are the key indicators

Read more

 

 

 

On January 28th 2015, from VoxEU: Bank resolution in Europe: The unfinished agenda of structural reform

By Georg Ringe, Jeffrey N. Gordon

 

Abstract: Bank resolution is a key pillar of the European Banking Union. This column argues that the current structure of large EU banks is not conducive to an effective and unbiased resolution procedure. The authors would require systemically important banks to reorganise into a ‘holding company’ structure, where the parent company holds unsecured term debt sufficient to cover losses at its operating financial subsidiaries. This would facilitate a ‘single point of entry’ resolution procedure, minimising the risk of creditor runs and destructive ring-fencing by national regulators.

Read more

 

 

 

On December 24th 2014, from VoxEU: Bank Resolution under T-LAC: The Aftermath

By Charles A.E. Goodhart

 

Abstract: The Financial Stability Board’s recent consultative document proposes dividing global systemically important banks into holding companies and operating subsidiaries so as to insulate the latter from a major loss. This column poses the question of what will happen after the holding company is liquidated or written down in order to recapitalise the operating subsidiary – a question as yet unanswered by the Financial Stability Board.

Read more

 

 

 

On December 19th 2014, from Bruegel: European banking union and financial integration

By Guntram B. Wolff 

 

Abstract: Repairing and deepening financial integration in the EU and the euro area will take time, but the more the ECB establishes itself as a supervisor, the more financial integration will advance.

Read more

 

 

 

On December 16th 2014, from FTAlphaville: How to regulate banks: crazy like a fox

By Matthew C Klein

 

Abstract: People don’t like it when banks default on their obligations, because lots of people use those obligations as money. Think of deposits, or commercial paper sold to money-market mutual funds. The problem is that, absent offsetting regulations, government guarantees preserve the value of these forms of money at the cost of transferring wealth to bankers and — to a much lesser extent — bank shareholders, while also encouraging excessive lending.

The $50 trillion question is: how can governments protect the savings of their citizens without creating new problems?

Read more

 

 

 

We also recommand the "Post-Crisis Banking Regulation Evolution of economic thinking as it happened on Vox", Edited by Jon Danielsson