Risk Management and the Costs of the Banking Crisis

Patrick Honohan ()

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: The 2007-8 banking crisis in the advanced economies has exposed deficiencies in risk management and prudential regulation approaches that rely too heavily on mechanical, albeit sophisticated, risk management models. These have aggravated private and economic losses, while perhaps protecting the taxpayer from bearing quite as high a share of the direct costs as in typical crises of the past. Policymakers and bankers need to recognize the limitations of rules-based regulation and restore a more discretionary and holistic approach to risk management.

New Economics Papers: this item is included in nep-ban, nep-pke, nep-reg and nep-rmg
Date: 2008-09-29
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