Little of the literature from economists on climate change has focused on how accelerating climate change will affect economic structure, and the consequences which follow. Here we analyze the medium- to long-term implications of global warming for global financial structure. Stern (2007)...

Fixed exchange rate regimes can be useful in generating anti-inflation credibility. The institutional features behind specific fixed exchange rate regimes are generally important for how much credibility can be gained. It is argued that unless it is possible to set up a fixed exchange rate...

Dodd-Frank Wall Street Reform regulations and other postcrisis regulations and guidelines have put enormous pressure on financial institutions to optimize the use of their scarce capital and to improve their return on equity (ROE) which has been significantly compressed compared to historical...

We present an overview of methods to estimate risk arising from operational losses. Our approach is based on the study of the statistical severity distribution of a single loss. We analyze the fundamental issues that arise in practice when modeling operational risk data. We address the...

A recurring criticism of U.S. bank supervisors is that their standards vary procyclicly with banking and economic conditions. The 2010 reforms of supervisory standards for bank capital adequacy and liquidity (Basel III) directly address procyclicality in supervision and its effects on credit...

This paper proposes a definition and assessment methodology for systemic financial risk that was inspired by systems accident research. Sociologist Charles Perrow found that industrial, aviation and marine systems are prone to failure if those systems are interactively complex and tightly...

In this study we survey practices and supervisory expectations for stress testing (ST) in a credit risk framework for banking book exposures. We introduce and motivate ST; and discuss the function, supervisory requirements and expectations, credit risk parameters, interpretation results with...

Has the political influence of the financial industry had any bearing on financial regulation and, ultimately, the recent financial crisis? This paper discusses the findings of recent research that uses a detailed database of the lobbying activities, campaign contributions, political connections...

One of the main topics in operational risk is the estimation of loss severity distribution. Numerous parametric estimations have been suggested, although very few work for both high frequency small losses and low-frequency big losses. In this paper the most used parametric models, kernel...

The intense concentration process taking place in the financial systems has attracted substantial attention from stakeholders and academics. The impact of M&A on the value creation and efficiency/effectiveness improvements of banks involved appears, on the whole, disappointing and it is still...