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 ...
Posted in Discussions | 1 Comment »
Sunday, May 4th, 2008
This table summarizes the losses by banks and securities firms as a result of the subprime crisis. Source: Bloomberg. If you are faced with a question on how to rank the losses resulting of the subprime crisis (see video here, via Bayesian Heresy), you might want to have the right ...
Posted in Discussions | 1 Comment »
Wednesday, April 30th, 2008
In most fields of regulation, even on the national level, organisation representing private interests or corporations have a saying. Private interestes are expressed through lobbyism and public relation activities, but the governance system in most states is characterized by representatives from the relevant industries having their say in standard-setting and ...
Posted in Memo | No Comments »
Sunday, April 20th, 2008
Below is a list of articles and quotes that discuss whether the Federal Reserve Bank was responsible for the housing bubble and the subsequent subprime crisis:
Eric Englund writes in April 22nd 2006 the article "The Federal Reserve and Housing: A Cluster of Errors?" warning about the link between interest rates ...
Posted in Discussions | No Comments »
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 ...
Posted in Discussions | No Comments »
Monday, April 14th, 2008
Kern Alexander, Rahul Dhumale and John Eatwell published a book in 2004 called "
Posted in Books | 4 Comments »
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 ...
Posted in Reports | No Comments »
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 ...
Posted in Reports | 5 Comments »
Thursday, April 10th, 2008
The IIF (which is essentially the main political lobby organisation of the large, multinational commercial banks) has released a new report on markets best practices. It can be seen as the response of the banks to the regulatory efforts of the G7 Finance Ministers and the FSF.
In summary, Banks ...
Posted in Reports | No Comments »