This paper develops a theory of the onset of financial crises by solving for the optimal trading strategies of speculators in financial markets, in a model where each speculator tries to coordinate her trades with the market''s by observing the decisions of other speculators, while...

The paper provides the IMF staff views on policy options to mitigate the risks posed by institutions perceived as too-important-to-fail (“TITF"). These institutions have become bigger and more complex since the crisis, and risky practices have started to reappear. The paper emphasizes the need...

DISCLAIMER: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published...

The paper's analysis underscores the importance of the ongoing Financial Stability Board-led process of identifying policy options, involving national authorities and the International Organization of Securities Commissions and other standard setters. In this context, the global nature of the...