This paper extends the approach of measuring and stress-testing the systemic risk of a banking sector in Huang, Zhou, and Zhu (2009) to identifying various sources of financial instability and to allocating systemic risk to individual financial institutions. The systemic risk measure, defined as...

The system of banking supervision in Europe is undergoing substantial reforms. According to Stigler's capture theory regulation often follows the preferences of producers. Therefore, the interests of the financial industry might be a major driving force for the ongoing supervisory reform debate....

This chapter of the forthcoming Oxford Handbook of Financial Regulation considers, in broad historical perspective and also with respect to the global financial crisis, why financial systems are crisis-prone and the relationship between financial crises and regulation. It begins with an overview...