Tuesday, May 6th, 2008
How to define pro-cyclicality
Procyclicality is used in the context of discussing the effects of Basel II on the financial system. A simplified definition of pro-cyclicality is:
International rules have encouraged banks to act more aggressively when the economic cycle is in the middle of an upswing, when some argue that is ...
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Saturday, April 19th, 2008
George Reisman, who is associated with the Mises Institute, has written an interesting article called "Our Financial House of Cards". As a student of Ludwig von Mises, he exemplifies the thinking of the Austrian School of Economics which is, like many libertarians, highly skeptical of government intervention in markets.
(This skepticism ...
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Sunday, April 13th, 2008
The FSF Report on Financial Stability (called "Enhancing Market and Institutional Resilience") was yesterday approved by the G7.
To assess the impact of the report on the global financial architecture and the responses to the credit crisis in the financial markets, it is worthwhile recalling the original demands of the G7.
In ...
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Sunday, April 13th, 2008
The G7 Finance Ministers met yesterday at the IMF Spring Meeting and approved a report prepared by the Financial Stability Forum, the main forum bringing together Central Banks, Regulators and Finance Ministers. Before discussing the report in detail, it is essential to get an overview of what the FSF is ...
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