This editorial examines global efforts to regulate the shadow banking system, in particular the green paper released by the European Commission in March 2012. It suggests that the financial market landscape in Europe is currently in flux and large swings in market activity — either through...

This paper develops a methodology to identify systemically important financial institutions building on that developed by the BCBS (2011) and used by the Financial Stability Board in its yearly G-SIFIs identification. This methodology is based on publicly available data, providing fully...

Most people have consumer loans during their lives, making it important that consumer credit legislation is effective. Legislation in many countries is based on the US Truth-in-Lending Act (TILA). Conventional financial analysis underlying the TILA argues the annual percentage rate (APR) is the...

The paper finds that, given New Zealand's conservative approach in implementing the Basel II framework, New Zealand banks' headline capital ratios underestimate their capital strength. A comparison with Canadian, UK and Australian banks highlights the impact of New Zealand's more conservative...

This paper uses Bayesian model averaging (BMA) techniques to examine the driving factors of equity returns of U.S. financial institutions. The main advantage of BMA is accounting for model uncertainty. For the period 1986-2010, we fi nd that the most likely model explaining banking sector...

In this comment we advance a number of guiding principles on matters of benchmark formation, administrative governance, screening, transparency and regulation, in response to the OICU-IOSCO Consultation Report on Financial Benchmarks dated January 2013 (“Report”). We are looking for...

We argue that a fundamental reason for the short term perspective of corporate executives is the short-term orientation of shareholders and financial markets that drive the performance benchmarks of CEOs. In our view, long-term committed shareholders can provide substantial benefits to the...

There are few things more constant in life than the rise and fall of financial markets. When markets crash, however, we are forced to restore them while learning from our mistakes. In the wake of the recent subprime mortgage crisis, Congress has drastically but deservedly overhauled the...

How much capital and liquidity does a bank need – to support its risk taking activities? During the recent (and still ongoing) financial crisis, answers to this question using standard approaches, e.g. regulatory capital ratios, were no longer credible, and thus broad-based supervisory stress...