Financial sector pro-cyclicality: lessons from the crisis
Fabio Panetta (),
Paolo Angelini (),
Francesco Columba (),
Antonio Di Cesare (),
Andrea Pilati (),
Carmelo Salleo and
Giovanni Santini ()
Additional contact information
Fabio Panetta: Bank of Italy
Andrea Pilati: Bank of Italy
Giovanni Santini: Bank of Italy
No 44, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area
We analyze the main forces affecting financial system pro-cyclicality (the fact that developments in the financial sector can amplify business cycle fluctuations). We first review some major structural developments in financial markets that may influence pro-cyclicality and that have been overlooked in earlier analyses. We then examine three issues that are center stage in the current debate: capital regulation, accounting standards and managersï¿½ incentives. After reviewing the institutional set-up and the key mechanisms at work, we critically examine a series of proposals designed to mitigate pro-cyclicality.
Keywords: pro-cyclicality; financial accelerator; capital requirements; leverage; accounting standards; incentives (search for similar items in EconPapers)
JEL-codes: E5 G1 G2 G3 M4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc
References: Add references at CitEc
Citations: View citations in EconPapers (61) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_44_09
Access Statistics for this paper
More papers in Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().