Financial Stability in Practice
Towards an Uncertain Future
Published on 30. April 2012
Book
Hardback
552 pages
978-1-84720-893-4 (ISBN)
Description
The maintenance of financial stability is a key objective of monetary policy, but the record of regulators in achieving this has been lamentable in recent years. This failure has been matched by an equivalent inability to establish an appropriate theoretical basis for financial regulation. In this book, the authors demonstrate how to enhance the theory, modeling and practice of such regulation. The main determinant of financial instability is the default of financial institutions. The authors highlight the importance of the appropriate incorporation of default into macro-financial models and its interaction with liquidity. Besides covering the historical development and current stance of financial regulation, the book includes a number of policy-oriented chapters revealing how the authors' modeling approach can improve the process.
This authoritative book will serve as a basis for future work on financial stability management for both academics and policy makers and provide guidance on how to undertake crisis prevention and resolution.
This authoritative book will serve as a basis for future work on financial stability management for both academics and policy makers and provide guidance on how to undertake crisis prevention and resolution.
Reviews / Votes
'Overall, I find Financial Stability in Practice: Towards an Uncertain Future by Goodhart and Tsomocos very useful in understanding how the financial sector works, why it should be regulated and how it can be regulated to achieve the main goal of financial stability.' -- Salewa Yinka Olawoye, Review of Keynesian EconomicsMore details
Language
English
Place of publication
Cheltenham
United Kingdom
Target group
Professional and scholarly
Dimensions
Height: 234 mm
Width: 156 mm
ISBN-13
978-1-84720-893-4 (9781847208934)
Copyright in bibliographic data and cover images is held by Nielsen Book Services Limited or by the publishers or by their respective licensors: all rights reserved.
Schweitzer Classification
Persons
Charles A.E. Goodhart, Emeritus Professor of Banking and Finance, and long-standing member of the Financial Markets Group, at the London School of Economics, UK and Dimitrios P. Tsomocos, Professor University Reader in Financial Economics and Fellow in Management, Said Business School and St. Edmund Hall, University of Oxford, UK
Content
Contents:
1. Introduction
Charles A.E. Goodhart and Dimitrios P. Tsomocos
PART I: THE DEVELOPMENT OF FINANCIAL REGULATION
2. 'Financial Supervision from an Historical Perspective: Was the Development of Such Supervision Designed, or Largely Accidental?', Charles A.E. Goodhart, in David Mayes and Geoffrey E. Wood (eds), The Structure of Financial Regulation, London, Routledge, 2007, pp.43-64
3. 'The Rationale for Regulation', Charles Goodhart, Philipp Hartmann, David Llewellyn, Liliana Rojas-Suarez and Steven Weisbrod, Financial Regulation: Why, How and Where Now?, London: Routledge, 1998, pp.1-15
4. 'Some New Directions for Financial Stability?', C.A.E. Goodhart, in D. Mayes, R. Pringle and M. Taylor (eds), Towards a New Framework for Financial Stability, London: Central Banking, 2009, pp.5-24
5. 'The Role of Macro-Prudential Supervision', paper presented by C.A.E. Goodhart at the Federal Reserve Bank of Atlanta Conference on 'Up from the Ashes: The Financial System after the Crisis', May 11/12, 2010, Atlanta, Georgia
6. 'How Should We Regulate the Financial Sector?', Charles Goodhart, in Adair Turner, Andrew Haldane, Paul Woolley, Sushil Wadhwani, Charles Goodhart, Andrew Smithers, Andrew Large, John Kay, Martin Wolf, Peter Boone, Simon Johnson and Richard Layard (eds), The Future of Finance: The LSE Report, London: School of Economics & Political Science, 2010, pp.153-76
PART II: MODELLING
7. 'A Model to Analyse Financial Fragility', Charles A.E. Goodhart and Lea Zicchino, Financial Stability Review, June 2005, 106-15
8. 'Equilibrium Analysis, Banking, Contagion and Financial Fragility', Dimitrios P. Tsomocos, Working Paper 175, Bank of England, 2003, 1,3,5,7-59
9. 'The Optimal Monetary Instrument for Prudential Purposes', with P. Sunirand, Journal of Financial Stability, 7, 2011, 70-77
10. 'On Dividend Restrictions and the Collapse of the Interbank Market', with M.U. Peiris and A.P. Vardoulakis, Annals of Finance, 6 (4), 2010, 455-73
PART III: MEASUREMENT
11. 'Towards a Measure of Financial Fragility', with Oriol Aspachs and Lea Zicchino, Annals of Finance, 3 (1), 2007, 37-74
12. 'Searching for a Metric for Financial Stability', with O. Aspachs, M. Segoviano and L. Zicchino, Financial Markets Group Special Paper 167, London School of Economics, 2006
13. 'Banking Stability Measures', Miguel A. Segoviano and Charles Goodhart, IMF Working Paper, WP/09/4, January 2009, 1-54
14. 'Default, Credit Growth and Asset Prices', C.A.E. Goodhart, Boris Hofmann and M. Segoviano, in Charles Goodhart and Boris Hofmann (eds), House Prices and the Macroeconomy, Oxford: Oxford University Press, 2007, pp.145-72
PART IV: CAPITAL REQUIREMENTS AND PROCYCLICALITY
15. 'Procyclicality and the New Basel Accord - Banks' Choice of Loan Rating System', Eva Catarineu-Rabell, Patricia Jackson and Dimitrios P. Tsomocos, Economic Theory, 26 (3), 2005, 537-57
16. 'Basel and Procyclicality: A Comparison of the Standardised and IRB Approaches to an Improved Credit Risk Method', C.A.E. Goodhart and M. Segoviano, Financial Markets Group Discussion Paper 524, London School of Economics, 2004
17 'Procyclicality and Volatility in the Financial System: The Implementation of Basel II and IAS 39', Ashley Taylor and Charles Goodhart, in Stefan Gerlach and Paul Gruenwald (eds), Procyclicality of Financial Systems in Asia, Basingstoke, UK: Palgrave Macmillan, 2006, pp.9-37
18. 'Is a Less Pro-cyclical Financial System an Achievable Goal?', Charles Goodhart, National Institute Economic Review, 211 (1), 2010, R17-R26
PART V: THE STRUCTURAL ORGANISATION OF SUPERVISION
19. 'The Organizational Structure of Banking Supervision', C.A.E. Goodhart, Economic Notes, 31 (1), 2002, 1-41, 43, 45-6
20. 'The Skill Profile of Central Bankers and Supervisors', (Charles Goodhart, Dirk Schoenmaker and Paolo Dasgupta, European Finance Review, 6, 2002, 397-427
21. 'The Changing Role of Central Banks', C.A.E. Goodhart, BIS Working Paper 326, 2010, 1-16
PART VI: CONCLUSION
22. Conclusion
Charles A.E. Goodhart and Dimitrios P. Tsomocos
1. Introduction
Charles A.E. Goodhart and Dimitrios P. Tsomocos
PART I: THE DEVELOPMENT OF FINANCIAL REGULATION
2. 'Financial Supervision from an Historical Perspective: Was the Development of Such Supervision Designed, or Largely Accidental?', Charles A.E. Goodhart, in David Mayes and Geoffrey E. Wood (eds), The Structure of Financial Regulation, London, Routledge, 2007, pp.43-64
3. 'The Rationale for Regulation', Charles Goodhart, Philipp Hartmann, David Llewellyn, Liliana Rojas-Suarez and Steven Weisbrod, Financial Regulation: Why, How and Where Now?, London: Routledge, 1998, pp.1-15
4. 'Some New Directions for Financial Stability?', C.A.E. Goodhart, in D. Mayes, R. Pringle and M. Taylor (eds), Towards a New Framework for Financial Stability, London: Central Banking, 2009, pp.5-24
5. 'The Role of Macro-Prudential Supervision', paper presented by C.A.E. Goodhart at the Federal Reserve Bank of Atlanta Conference on 'Up from the Ashes: The Financial System after the Crisis', May 11/12, 2010, Atlanta, Georgia
6. 'How Should We Regulate the Financial Sector?', Charles Goodhart, in Adair Turner, Andrew Haldane, Paul Woolley, Sushil Wadhwani, Charles Goodhart, Andrew Smithers, Andrew Large, John Kay, Martin Wolf, Peter Boone, Simon Johnson and Richard Layard (eds), The Future of Finance: The LSE Report, London: School of Economics & Political Science, 2010, pp.153-76
PART II: MODELLING
7. 'A Model to Analyse Financial Fragility', Charles A.E. Goodhart and Lea Zicchino, Financial Stability Review, June 2005, 106-15
8. 'Equilibrium Analysis, Banking, Contagion and Financial Fragility', Dimitrios P. Tsomocos, Working Paper 175, Bank of England, 2003, 1,3,5,7-59
9. 'The Optimal Monetary Instrument for Prudential Purposes', with P. Sunirand, Journal of Financial Stability, 7, 2011, 70-77
10. 'On Dividend Restrictions and the Collapse of the Interbank Market', with M.U. Peiris and A.P. Vardoulakis, Annals of Finance, 6 (4), 2010, 455-73
PART III: MEASUREMENT
11. 'Towards a Measure of Financial Fragility', with Oriol Aspachs and Lea Zicchino, Annals of Finance, 3 (1), 2007, 37-74
12. 'Searching for a Metric for Financial Stability', with O. Aspachs, M. Segoviano and L. Zicchino, Financial Markets Group Special Paper 167, London School of Economics, 2006
13. 'Banking Stability Measures', Miguel A. Segoviano and Charles Goodhart, IMF Working Paper, WP/09/4, January 2009, 1-54
14. 'Default, Credit Growth and Asset Prices', C.A.E. Goodhart, Boris Hofmann and M. Segoviano, in Charles Goodhart and Boris Hofmann (eds), House Prices and the Macroeconomy, Oxford: Oxford University Press, 2007, pp.145-72
PART IV: CAPITAL REQUIREMENTS AND PROCYCLICALITY
15. 'Procyclicality and the New Basel Accord - Banks' Choice of Loan Rating System', Eva Catarineu-Rabell, Patricia Jackson and Dimitrios P. Tsomocos, Economic Theory, 26 (3), 2005, 537-57
16. 'Basel and Procyclicality: A Comparison of the Standardised and IRB Approaches to an Improved Credit Risk Method', C.A.E. Goodhart and M. Segoviano, Financial Markets Group Discussion Paper 524, London School of Economics, 2004
17 'Procyclicality and Volatility in the Financial System: The Implementation of Basel II and IAS 39', Ashley Taylor and Charles Goodhart, in Stefan Gerlach and Paul Gruenwald (eds), Procyclicality of Financial Systems in Asia, Basingstoke, UK: Palgrave Macmillan, 2006, pp.9-37
18. 'Is a Less Pro-cyclical Financial System an Achievable Goal?', Charles Goodhart, National Institute Economic Review, 211 (1), 2010, R17-R26
PART V: THE STRUCTURAL ORGANISATION OF SUPERVISION
19. 'The Organizational Structure of Banking Supervision', C.A.E. Goodhart, Economic Notes, 31 (1), 2002, 1-41, 43, 45-6
20. 'The Skill Profile of Central Bankers and Supervisors', (Charles Goodhart, Dirk Schoenmaker and Paolo Dasgupta, European Finance Review, 6, 2002, 397-427
21. 'The Changing Role of Central Banks', C.A.E. Goodhart, BIS Working Paper 326, 2010, 1-16
PART VI: CONCLUSION
22. Conclusion
Charles A.E. Goodhart and Dimitrios P. Tsomocos