This paper while emphasising the importance of the concept of financial stability in wake of recent global financial crisis in particular and other (banking and financial) crises in general attempts to highlight the significance of the soundness of banking sector in emerging economies where...

We identify the tension between dueling expectations of financial institutions as value-maximizing entities that also serve the public interest. We highlight the importance of information in addressing the public desire for banks to be safe yet innovative. Regulators can choose several...

Understanding the nature of systemic risk and identifying the channels of diffusion of the shocks are the necessary prerequisite to anticipate and manage successfully the insurgence of financial crises. In order to prevent financial distress and manage instability, the macroprudential regulator...

This Paper analyses firms’ capital allocation decisions when optimal capital structure is linked to the risk of underlying assets and when equity capital is costly and cannot be raised instantaneously. In the model, division managers receive private information and authority is delegated to...

We examine the pervasive view that “equity is expensive,” which leads to claims that high capital requirements are costly and would affect credit markets adversely. We find that arguments made to support this view are either fallacious, irrelevant, or very weak. For example, the return on...

The Kosovo’s Financial Sector is one of the newest financial sectors in Eastern Europe whose developments began in early 2000. Kosovo's banking sector consists of 8 privately owned commercial banks, the insurance companies which make up 5% of total financial sector assets by 10 insurance...

We examine the pervasive view that “equity is expensive,” which leads to claims that high capital requirements are costly for society and would affect credit markets adversely. We find that arguments made to support this view are fallacious, irrelevant to the policy debate by confusing...

As the number of financial institutions that are moving operations overseas has grown, so has the attention of regulators. This article looks at some of the regulations that financial institutions need to be aware of when considering moving operations overseas and some guidelines on how...

With governments around the world taking a renewed interest in effective consumer financial protection, this paper focuses on four key pillars: financial literacy, disclosure, advice, and product regulation. Although there is no one ‘silver bullet’ that will provide effective consumer...

During the present financial crisis, the focus of the regulation and supervision of financial institutions has shifted from being institution-based (microprudential) towards the systemic level (macroprudential). A special element of the macroprudential regulatory and supervisory toolkit is the...