Purpose – This paper seeks to analyse reasons behind the difficulties faced by Northern Rock (NR) and the UK financial system and proposes a return to a more traditional/prudent banking business model, based on a sound balance between sources and uses of funds. Design/methodology/approach –...

Purpose – This paper seeks to analyse reasons behind the difficulties faced by Northern Rock (NR) and the UK financial system and proposes a return to a more traditional/prudent banking business model, based on a sound balance between sources and uses of funds. Design/methodology/approach –...

We analyze whether four market-based measures of the global systemic importance of financial institutions offer early warning signals during three financial crises. The tests based on the 2007/2008 crisis show that only one measure (∆CoVaR) consistently adds predictive power to conventional...