How To Identify Systemically Important Financial Institutions

Zlatuse Komarkova (), Václav Hausenblas and Jan Frait ()

Chapter Thematic Article 1 in CNB Financial Stability Report 2011/2012, 2012, pp 100-111 from Czech National Bank, Research and Statistics Department

Abstract: The crisis has brought the issue of regulating large, complex and highly interconnected financial institutions back into the spotlight. Supervisory and other competent authorities have discovered that they have only limited ways of preventing an idiosyncratic shock in one institution from turning into a system-wide shock and of stopping the contagion spreading to other domestic and foreign financial institutions. This article aims to draw attention to the risks associated with the existence of systemically important financial institutions. It discusses methods for identifying systemically important financial institutions, including the approach proposed by BCBS (2011b), which is applied to the Czech banking system for illustration. Overall, our systemic importance results show that there is a large number of normally important financial institutions on average and a very small number of more important institutions. Moreover, there is high variance among the most important institutions in the results. In connection with the newly proposed regulation, the article presents possible instruments for increasing the resilience of such institutions to systemic risk.

Date: 2012
ISBN: 978-80-87225-37-0
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://www.cnb.cz/export/sites/cnb/en/financial-s ... 1-2012_article_i.pdf (application/pdf)
https://www.cnb.cz/en/financial-stability/thematic ... financial-stability/ (text/html)

Related works:
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:cnb:ocpubc:fsr1112/1

Access Statistics for this chapter

More chapters in Occasional Publications - Chapters in Edited Volumes from Czech National Bank, Research and Statistics Department Contact information at EDIRC.
Bibliographic data for series maintained by Tomas Karhanek ().