This paper discusses two pertinent policy issues dealing with the global liquidity crisis - global prudential regulation reform, and reassessment of using international reserves in the crisis. We point out the paradox of prudential regulations – while the identity of economic actors that...

This paper discusses two pertinent policy issues dealing with the global liquidity crisis - global prudential regulation reform, and reassessment of using international reserves in the crisis. We point out the paradox of prudential regulations – while the identity of economic actors that...

The global financial crisis posed as much of a challenge for the foreign exchange reserve policies of emerging countries as it did for their economic policies and financial systems. This pushed many countries into rethinking their strategies about foreign exchange reserves. This study presents...

In this paper, we describe the evolution of the Federal Reserve’s swap lines from their inception in 1962 as a mechanism to forestall claims on US gold reserves under Bretton Woods to their use during the Great Recession as a means of extending emergency dollar liquidity. We describe the...

In this paper the author reviews the use of precautionary measures aimed at mitigating emerging markets' exposure to fragility associated with financial integration. The discussion draws possible lessons from the ongoing global liquidity crisis. The fear of losing international reserves (IR)...

Mortgage banking subsidiaries of bank holding companies (BHCs) became increasingly active players in the mortgage origination market during the last decade. At the time, the Federal Reserve Board (FRB) had supervisory power over BHCs, and under the Bank Holding Company Act was authorized to...

Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules? As well as Basel III reforms which are geared towards greater facilitation of financial...

In response to the recent Financial Crisis - after it had been widely accepted that “a serious disturbance in the economy of Member States” had occurred, and that several measures were required to remedy this disturbance, various Commission communications were adopted. The Communications...

Following the onset of the August 2007 subprime mortgage crisis, bank regulators suggest that the old definition of bank may be too narrow – that banking has partially escaped their purview. Perhaps, but this may be partly the regulators’ own doing. We develop this proposition through...

We investigate the optimal regulation of financial conglomerates which combine a bank and a non-bank financial institution. The conglomerate`s risk-taking incentives depend upon the level of market discipline it faces, which in turn is determined by the conglomerate`s liability structure. We...