The financial trilemma states that financial stability, financial integration and national financial policies are incompatible. Any two of the three objectives can be combined but not all three; one has to give. This paper develops a model to underpin the financial trilemma

Using a new database covering some 91 supervisory agencies, this paper examines how important various skilled experts are in the regulatory process and the relative usage of different kinds of such experts. We seek to explore what kind of perspective supervisors in different institutional...

Pan-European banks are starting to emerge, while arrangements for financial supervision and stability are still nationally rooted. This raises the issue who should bear the burden of any proposed recapitalisation should failures occur in a large cross-border bank. A recapitalisation is efficient...

This paper presents a model to analyse alternative interbank settlement systems. Intraday credit exposures in netting systems generate systemic risk (the failure by one bank to settle at the end of the day may cause a chain of bank failures). To prevent this, mutual loss-sharing is implemented....

This paper reviews the ongoing efforts to reduce the risks inherent in the world`s principal wholesale payment systems. The paper assesses the major policy proposals to contain the growth in intraday credit exposures that arises in net settlement wholesale payment systems and in the real-time...

This paper analyses the degree of internationalisation of insurance business. Using a novel dataset of 25 large EU insurance groups, we find that the insurance industry has a strong international orientation. About 55 per cent of the business of these large insurance groups is conducted abroad....

This paper focuses on the recapitalisation of failing banks. A recapitalisation is efficient if the social benefits (preserving systemic stability) exceed the cost of recapitalisation. In a national setting, the implementation of an optimal policy is relatively straightforward. But in a...

We study the dependence between the downside risk of European banks and insurers. Since the downside risk of banks and insurers differs, an interesting question from a supervisory point of view is the risk reduction that derives from diversification within large banks and financial...