The recent crisis was characterized by massive illiquidity. This paper reviews what we know and don't know about illiquidity and all its friends: market freezes, fire sales, contagion, and ultimately insolvencies and bailouts. It first explains why liquidity cannot easily be apprehended through...

Financial crises can have a severe impact on the real side of the economy with countries losing up to 20 percent of GDP. The paper studies rules that prevent financial instability and currency crises. These include institutional arrangements for a solid banking system, prudent regulations and...

The present discussions about the future of bank regulation, coming after a long period of bank deregulation, have a natural tendency to exaggerate the effectiveness of regulation. But those discussions are poorly rooted in the macroeconomic foundations of bank intermediation, including its...

This study identifies five distinctive stages of the current global financial crisis: the meltdown of the subprime mortgage market, spillovers into broader credit market, the liquidity crisis epitomized by the fallout of Northern Rock, Bear Stearns with contagion effects on other financial...

The system of banking supervision in Europe is undergoing substantial reforms. According to Stigler?s capture theory regulation often follows the preferences of producers. Therefore, the interests of the financial industry might be a major driving force for the ongoing supervisory reform debate....

This study identifies five distinctive stages of the current global financial crisis: the meltdown of the subprime mortgage market; spillovers into broader credit market; the liquidity crisis epitomized by the fallout of Northern Rock, Bear Stearns and Lehman Brothers with counterparty risk...

Globalisierungsprozesse erzeugen Problemlagen, die allein durch nationalstaatliche Intervention nicht mehr zu bewältigen sind. Pessimistische Szenarien schließen daraus auf ein generelles "Steuerungsversagen" des Nationalstaates mit der Folge einer wettbewerblichen Deregulierung von...