Reforming financial systems after the crisis: a comparison of EU and USA

Since July 2007, the developed countries faced the most serious and disruptive crisis after the 1929 Great Depression. As the crisis unfolded, policy authorities stepped in to support troubled financial institutions with large bailouts. This prevented a meltdown of the system, but at the cost of lar...

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Main Author: Rainer Masera
Format: Article
Language:English
Published: Associazione Economia civile 2010-01-01
Series:PSL Quarterly Review
Subjects:
Online Access:http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9423/9318
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spelling doaj-dc5eb5bb05054642b212c39cdd1bbffb2020-11-25T00:26:57ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432010-01-0163255299362Reforming financial systems after the crisis: a comparison of EU and USARainer MaseraSince July 2007, the developed countries faced the most serious and disruptive crisis after the 1929 Great Depression. As the crisis unfolded, policy authorities stepped in to support troubled financial institutions with large bailouts. This prevented a meltdown of the system, but at the cost of largest ever moral hazard, huge losses for taxpayers, shocks to fiscal sustainability, with probabilities of distress going up across sovereigns. Repair of financial regulation and supervision was necessary to reduce systemic risk and to achieve financial stability. Both in the EU and in the USA new frameworks have been and are being established. They share a common approach, based on a new regulatory agenda, stronger coordinated supervision Ð macro and micro prudential Ð and crisis management procedures. This paper offers a critical analysis of the two models of financial reform being enacted and points to weaknesses, notably in respect of effective, coordinated crisis management procedures.http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9423/9318financial regulatory and supervisory frameworksystemic riskcrisis managementBasel IIISIFIs
collection DOAJ
language English
format Article
sources DOAJ
author Rainer Masera
spellingShingle Rainer Masera
Reforming financial systems after the crisis: a comparison of EU and USA
PSL Quarterly Review
financial regulatory and supervisory framework
systemic risk
crisis management
Basel III
SIFIs
author_facet Rainer Masera
author_sort Rainer Masera
title Reforming financial systems after the crisis: a comparison of EU and USA
title_short Reforming financial systems after the crisis: a comparison of EU and USA
title_full Reforming financial systems after the crisis: a comparison of EU and USA
title_fullStr Reforming financial systems after the crisis: a comparison of EU and USA
title_full_unstemmed Reforming financial systems after the crisis: a comparison of EU and USA
title_sort reforming financial systems after the crisis: a comparison of eu and usa
publisher Associazione Economia civile
series PSL Quarterly Review
issn 2037-3635
2037-3643
publishDate 2010-01-01
description Since July 2007, the developed countries faced the most serious and disruptive crisis after the 1929 Great Depression. As the crisis unfolded, policy authorities stepped in to support troubled financial institutions with large bailouts. This prevented a meltdown of the system, but at the cost of largest ever moral hazard, huge losses for taxpayers, shocks to fiscal sustainability, with probabilities of distress going up across sovereigns. Repair of financial regulation and supervision was necessary to reduce systemic risk and to achieve financial stability. Both in the EU and in the USA new frameworks have been and are being established. They share a common approach, based on a new regulatory agenda, stronger coordinated supervision Ð macro and micro prudential Ð and crisis management procedures. This paper offers a critical analysis of the two models of financial reform being enacted and points to weaknesses, notably in respect of effective, coordinated crisis management procedures.
topic financial regulatory and supervisory framework
systemic risk
crisis management
Basel III
SIFIs
url http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9423/9318
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