Abstract: The recent global financial crisis has exposed weaknesses in economic policy and financial structure on a national and international level. The aim of this paper is to underline how the present financial crisis affects the financial stability. The study is structured on chapters that...

The paper reviews the sources of market failure in financial institutions and markets and what can be done to alleviate them. It examines game-theoretic explanations for financial instability, in particular the role of asymmetric information in generating destabilizing behavior. In the area of...

The narrow banking proposal defining a class of safe and liquid assets (generally sovereign Government securities) for investments by weak banks, backed fully by demand liabilities (generally non-interest bearing deposits) has been considered as a means of deposit protection and a possible...

The evolving transnational supervisory arrangements do not fully address the existing asymmetries in institutional arrangements. Seeking to broad base the unrepresentative arrangements to include the developing countries in the standard setting process and thus enhancing the universality of...

The paper traces the determinants of depositor discipline in Indian banking. Using data for the period 1997:1 to 2002:4, the findings reveal that, while bank-specific factors are dominant in case of state-owned banks, systemic variables tend to overwhelm bank-specific factors in explaining...

Policy debate with regard to financial intermediaries has focused on whether, and to what extent, governments should impose capital adequacy requirements on banks, or alternately, whether market forces could also ensure the stability of banking systems. The paper contributes to this debate by...