As a response to the global financial crisis that started in 2008, many countries established dedicated resolution regimes that seek to limit the use of taxpayer money while maintaining the functions of failing banks that are critical for financial stability. This paper extends the existing...

Preventing future bail-outs for large, systemically important banks while minimizing the repercussions of bank insolvencies on the stability of the financial system and the economy at large has become a key policy objective for international standard-setters as well as national and supranational...

While it is recognized that the high degree of leverage used by financial institutions creates systemic risks and other negative externalities, many argue that equity financing is “expensive,” and that increased capital requirements will increase the cost of credit. Public subsidies of debt...

We take issue with claims that the funding mix of banks, which makes them fragile and crisis-prone, is efficient because it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy that banks' distress and default cause, such claims are...

We take issue with claims that the funding mix of banks, which makes them fragile and crisisprone, is efficient because it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy that banks' distress and default cause, such claims are...

Custodians play a key but discrete role in the global financial market infrastructure. In Europe, they are licensed as "credit institutions ", a legal requirement for European deposit-taking institutions, and therefore they face the same prudential requirements as "traditional" banks. However,...

The paper analyzes the relationship between bank competition and stability, with a specific focus on the Middle East and North Africa. Price competition has a positive effect on bank liquidity, as it induces self-discipline incentives on banks for the choice of bank funding sources and for the...

This Chapter discusses the regulatory, legislative and institutional framework for two capital-based macroprudential instruments, i.e. the Capital Conservation Buffer (hereinafter: CCoB) and the Countercyclical Capital Buffer (hereinafter: CCyB). At the outset, a brief historical background...