This article uses a Value‐at‐Risk approach to derive an estimator of the failure probability of a financial institution. The proposed approach can be applied to any profit/loss distribution, although Extreme Value (EV) theory also tells us that the most appropriate distributions are EV. The...

The pre‐commitment approach to bank capital regulation proposes that banks self‐select capital reserve requirements, facing penalties ex post for incurring losses in excess of reserves, hence providing incentives for high‐ risk banks to choose higher capital requirements. In order to...

Purpose – The purpose of this paper is to review the way in which auditing issues have been raised and addressed during the credit crunch and developing global financial crisis. Design/methodology/approach – Analysis is based on a review of the academic auditing literature, regulatory and...

Kevin Dowd argues that states must allow a level playing field as far as private money is concerned. For too long the government has stifled competition between state-backed and private currencies. Instead, central banks should welcome competition as it forces them to offer consumers greater...

An engaging look at how modern finance almost destroyed our global economy Over the last thirty years, capital markets have been restructured through the tenets of modern finance. This has been enormously profitable for the financial services sector. However, these innovations, coupled with...

Intro -- _Hlk488832294 -- __DdeLink__3072_333543986 -- Figure 1 Spending equilibrium: free banking -- Figure 2 Quarterly value of Fedwire transactions and nominal GDP (1992 = 100) -- Figure 3 US CPI (average 1982-84 = 100), US nominal GDP (million of dollars) -- The authors -- Foreword --...