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 study identifies five distinctive stages of the current global financial crisis: the meltdown of the subprime mortgage market; spillovers into broader credit market; the liquidity crisis epitomized by the fallout of Northern Rock, Bear Stearns and Lehman Brothers with counterparty risk...

The divergence between increasingly supranational financial markets on the one hand and still largely national supervisory structures on the other gives rise to tensions which reduce the effectiveness of the supervision. It lies in the interests of both the public and the private sector that the...

Globalisierungsprozesse erzeugen Problemlagen, die allein durch nationalstaatliche Intervention nicht mehr zu bewältigen sind. Pessimistische Szenarien schließen daraus auf ein generelles "Steuerungsversagen" des Nationalstaates mit der Folge einer wettbewerblichen Deregulierung von...

Securitization is a financial innovation that experiences a boom-bust cycle, as many other innovations before. This paper analyzes possible reasons for the breakdown of primary and secondary securitization markets, and argues that misaligned incentives along the value chain are the primary cause...

Die Vorstellung selbst-stabilisierender, zum Gleichgewicht tendierender Finanzmärkte, lange Zeit als Selbstverständlichkeit angesehen, ist durch die aktuelle Banken- und Kreditkrise in Frage gestellt. Trotz ausgefeilten Risikomanagements der Banken und einer an Basel II orientierten Aufsicht...

The liberalization of capital accounts and the integration of financial markets in recent years have helped to spur growth in many emerging markets and have allowed global investors to diversify risks internationally. Furthermore, increased capita! mobility has helped to tame governments in...

In the analysis of the credit crisis of 2007-2010 a clear distinction should be made between (i) the initial shock; (ii) the propagation and amplification of the initial shock to the systemic crisis of the financial markets; and (iii) the transmission of the credit crisis to the real economic...

According to conventional wisdom, the Basel II Accord - a set of capital adequacy standards for international banks drawn up by a committee of G-10 supervisors - is essential if we are to avoid another financial crisis. This paper argues that this conclusion is false: Basel II is not the...

The paper discusses the pros and cons of capital account liberalization. Rather than contrasting liberalization and regulation of capital flows as irreconcilable antagonisms, we argue that capital account liberalization requires institutional and regulatory safeguards. Even though the...