The regulatory response to the financial crisis

C.A.E. Goodhart

Journal of Financial Stability, 2008, vol. 4, issue 4, 351-358

Abstract: There are numerous aspects concerning financial regulation which the current financial turmoil has high-lighted. These include: (1) the form of deposit insurance; (2) bank solvency regimes, 'prompt corrective action'; (3) Central Banks' money market operations; (4) commercial bank liquidity risk management; (5) procyclicality of CARs (and mark-to-market); lack of counter-cyclical instruments; (5) boundaries of regulation, conduits, SIVs and reputational risk; (6) crisis management: (a) within countries, e.g. UK Tripartite Committee; or (b) cross-border, how to allocate the burden of cross-border defaults? This paper describes how the crisis exposed regulatory failings, drawing largely on UK experience, and suggests remedies.

Keywords: Financial; regulations; Deposit; insurance; Prompt; corrective; action; Crisis; management; Procyclicality (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (45)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:4:y:2008:i:4:p:351-358

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