A MODEL FOR THE INTERVENTION OF A FINANCIAL CRISIS

Janice M. Barrow

Global Journal of Business Research, 2012, vol. 6, issue 2, 41-48

Abstract: This paper builds a model for intervention and/or mitigation of a financial crisis by first identifying those conditions precedent to a systemic based financial crisis, and then outlying a process to integrate firm specific and systematic risk into a comprehensive strategic model. A simple application of the model was able to identify significant outliers. For example, using 2006 to 2010 data, Capital One Financial Corporation was identified for intervention from as early as 2006. This corporation received $3.56 billion of the Emergency Economic Stabilization Act Federal bailout funds.

Keywords: Systematic risk; financial crisis; banking; reform; failure; regulation; capital; interconnectedness; macro-prudential; micro-prudential (search for similar items in EconPapers)
JEL-codes: G01 G28 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ibf:gjbres:v:6:y:2012:i:2:p:41-48

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