EconPapers    
Economics at your fingertips  
 

A Proposal for the Resolution of Systemically Important Assets and Liabilities: The Case of the Repo Market

Viral Acharya and T. Sabri Öncü
Additional contact information
T. Sabri Öncü: Centre for Advanced Financial Research and Learning, Reserve Bank of India and New York University Stern School of Business

International Journal of Central Banking, 2013, vol. 9, issue 1, 291-351

Abstract: One of the several regulatory failures behind the global financial crisis that started in 2007 has been the regulatory focus on individual, rather than systemic, risk of financial institutions. Focusing on systemically important assets and liabilities (SIALs) rather than individual financial institutions, we propose a set of resolution mechanisms, which is not only capable of inducing market discipline and mitigating moral hazard but also of addressing the associated systemic risk, for instance, due to the risk of fire sales of collateral assets. Furthermore, because of our focus on SIALs, our proposed resolution mechanisms would be easier to implement at the global level compared with mechanisms that operate at the level of individual institutional forms. We, then, outline how our approach can be specialized to the repo market and propose a repo resolution authority for reforming this market.

JEL-codes: G01 G18 G21 G28 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www.ijcb.org/journal/ijcb13q0a14.pdf (application/pdf)
http://www.ijcb.org/journal/ijcb13q0a14.htm (text/html)

Related works:
Working Paper: A proposal for the resolution of systemically important assets and liabilities: The case of the repo market (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2013:q:0:a:14

Access Statistics for this article

International Journal of Central Banking is currently edited by Loretta J. Mester

More articles in International Journal of Central Banking from International Journal of Central Banking
Bibliographic data for series maintained by Bank for International Settlements ().

 
Page updated 2025-03-19
Handle: RePEc:ijc:ijcjou:y:2013:q:0:a:14