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Financial Crisis Containment and Government Guarantees
Financial Crisis Containment and Government Guarantees analyses the international community’s commitment to forging enhanced, well thought-out, mechanisms for containing systemic risks in the context of a highly interconnected global financial framework which incorporates ongoing financial innovation.
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Critical Acclaim
Contributors
Contents
More Information
Financial Crisis Containment and Government Guarantees analyses the international community’s commitment to forging enhanced, well thought-out, mechanisms for containing systemic risks in the context of a highly interconnected global financial framework which incorporates ongoing financial innovation.
While use of government guarantees is a central theme, the book also analyses the roles played by prudential regulators, central banks, deposit insurers and treasuries in dealing with the crisis. The book examines how governments, central banks, regulators and deposit insurance agencies have worked together to contain the global financial crisis. Additionally, it focuses on efforts to overcome ongoing obstacles, as well as the most important proposals to improve safety nets, both at the national level and internationally.
This concise and detailed book will strongly appeal to students in law, economics and finance, law practitioners, policymakers in central banks and ministries of finance, as well as deposit protection agencies and regulatory agencies.
While use of government guarantees is a central theme, the book also analyses the roles played by prudential regulators, central banks, deposit insurers and treasuries in dealing with the crisis. The book examines how governments, central banks, regulators and deposit insurance agencies have worked together to contain the global financial crisis. Additionally, it focuses on efforts to overcome ongoing obstacles, as well as the most important proposals to improve safety nets, both at the national level and internationally.
This concise and detailed book will strongly appeal to students in law, economics and finance, law practitioners, policymakers in central banks and ministries of finance, as well as deposit protection agencies and regulatory agencies.
Critical Acclaim
‘This enlightening volume provides an invaluable guide for those perplexed by the seemingly intractable problems of financial crises, sovereign distress, and government guarantees. Contributors include an all-star cast of leading figures in the field. Highly recommended.’
– Geoffrey Miller, New York University, US
‘The history of the 2007–09 and possibly beyond near-global financial crisis needs to be examined carefully in order to identify and understand the causes, the transmission across countries, the harm to macroeconomies, the public policies adopted, the effectiveness of such policies, and the lessons to be learned to prevent or at least mitigate future such crises. This volume contributes to this task. It brings together under one cover the analyses of the various aspects of the crisis by experts in each area. It should be priority reading for serious students of the crisis.’
– George G. Kaufman, Loyola University Chicago, US
‘The combination of the skills of the lawyer and of the economist has proved increasingly fruitful, developing both understanding and policy in many areas of life, such as accident prevention, crime prevention, and healthcare. This book follows the precedent of these areas and assembles a group of lawyers and economists who by their contributions, consider how best to deal with financial crises, and how to make their future occurrence less likely. It is both intellectually stimulating and practically important. The authors and editors are to be congratulated.’
– Geoffrey Wood, Cass Business School and University of Buckingham, UK
– Geoffrey Miller, New York University, US
‘The history of the 2007–09 and possibly beyond near-global financial crisis needs to be examined carefully in order to identify and understand the causes, the transmission across countries, the harm to macroeconomies, the public policies adopted, the effectiveness of such policies, and the lessons to be learned to prevent or at least mitigate future such crises. This volume contributes to this task. It brings together under one cover the analyses of the various aspects of the crisis by experts in each area. It should be priority reading for serious students of the crisis.’
– George G. Kaufman, Loyola University Chicago, US
‘The combination of the skills of the lawyer and of the economist has proved increasingly fruitful, developing both understanding and policy in many areas of life, such as accident prevention, crime prevention, and healthcare. This book follows the precedent of these areas and assembles a group of lawyers and economists who by their contributions, consider how best to deal with financial crises, and how to make their future occurrence less likely. It is both intellectually stimulating and practically important. The authors and editors are to be congratulated.’
– Geoffrey Wood, Cass Business School and University of Buckingham, UK
Contributors
Contributors: L.C. Buchheit, G. Calice, J. Chen, C.M. Cumming, C. Enoch, A. Estrella, M. Faure, G.G. Garcia, C.A.E. Goodhart, G. Grande, M. Gulati, M. Guðmundsson, K. Heine, E. Hüpkes, J.R. LaBrosse, R.M. Lastra, A. Levy, J. Manns, D.G. Mayes, J.F. McCollum, M.J. Nieto, J.J. Norton, R. Olivares-Caminal, F. Panetta, C. Pleister, S. Schich, D. Singh, J. Williams, A.E. Wilmarth, Jr., A. Zaghini
Contents
Contents:
Foreword
Joseph J. Norton
Foreword
Arthur E. Wilmarth, Jr.
Preface
John Raymond LaBrosse, James F. McCollum, Rodrigo Olivares-Caminal and Dalvinder Singh
PART I: MANAGING THE FINANCIAL CRISIS
1. Managing Crises Without Government Guarantees: How Do We Get There?
Christine M. Cumming
2. Improving the Decision-making Framework for Financial Crisis Management
John Raymond LaBrosse and Dalvinder Singh
3. Powers and Scope of the Macro-prudential Authority
Charles A.E. Goodhart
4. Resolving Systemically Important Financial Institutions (SIFIs): The Financial Stability Board Key Attributes of Effective Resolution Regimes
Eva Hüpkes
PART II: THE SPECIAL PROBLEMS OF EUROPE
5. Crisis Management and Guarantees in Europe
Charles Enoch
6. Regulatory Responses to the Financial Crisis
Rosa M. Lastra
7. The Federal Agency for Financial Market Stabilisation: From Rescuing to Restructuring
Christopher Pleister
8. Extraordinary Measures for Extraordinary Times and the Need for Effective Bank Resolution Laws in Europe
Gillian G. Garcia and Maria J. Nieto
PART III: USING GOVERNMENT GUARANTEES
9. The Fault Lines in Cross-border Banking: Lessons from the Icelandic Case
Már Guðmundsson
10. Government Guarantees and Contingent Capital: Choosing Good Shock Absorbers
David G. Mayes
11. Public Guarantees on Bank Bonds: Effectiveness and Distortions
Giusèppe Grande, Aviram Levy, Fabio Panetta and Andrea Zaghini
12. The Impact of Sovereign Guarantees on the Quality of Bank Debt: Theory and Evidence from Europe
Arturo Estrella and Sebastian Schich
13. An Insurance Approach for Preventing Financial Crises
Michael Faure and Klaus Heine
14. Transforming Bailouts into Investments: A Proposal for the Creation of the Federal Government Investment Corporation
Jeffrey Manns
PART IV: SOVEREIGN DEBT ISSUES
15. The Treatment of Contingent Liabilities in a Sovereign Debt Restructuring
Lee C. Buchheit and Mitu Gulati
16. The European Stability Mechanism: Some Notes on a New EU Institution Designed to Avert Financial Crises
Rodrigo Olivares-Caminal
17. Liquidity Spillovers in Credit Markets During the Eurozone Crisis
Giovanni Calice, Jing Chen and Julian Williams
Index
Foreword
Joseph J. Norton
Foreword
Arthur E. Wilmarth, Jr.
Preface
John Raymond LaBrosse, James F. McCollum, Rodrigo Olivares-Caminal and Dalvinder Singh
PART I: MANAGING THE FINANCIAL CRISIS
1. Managing Crises Without Government Guarantees: How Do We Get There?
Christine M. Cumming
2. Improving the Decision-making Framework for Financial Crisis Management
John Raymond LaBrosse and Dalvinder Singh
3. Powers and Scope of the Macro-prudential Authority
Charles A.E. Goodhart
4. Resolving Systemically Important Financial Institutions (SIFIs): The Financial Stability Board Key Attributes of Effective Resolution Regimes
Eva Hüpkes
PART II: THE SPECIAL PROBLEMS OF EUROPE
5. Crisis Management and Guarantees in Europe
Charles Enoch
6. Regulatory Responses to the Financial Crisis
Rosa M. Lastra
7. The Federal Agency for Financial Market Stabilisation: From Rescuing to Restructuring
Christopher Pleister
8. Extraordinary Measures for Extraordinary Times and the Need for Effective Bank Resolution Laws in Europe
Gillian G. Garcia and Maria J. Nieto
PART III: USING GOVERNMENT GUARANTEES
9. The Fault Lines in Cross-border Banking: Lessons from the Icelandic Case
Már Guðmundsson
10. Government Guarantees and Contingent Capital: Choosing Good Shock Absorbers
David G. Mayes
11. Public Guarantees on Bank Bonds: Effectiveness and Distortions
Giusèppe Grande, Aviram Levy, Fabio Panetta and Andrea Zaghini
12. The Impact of Sovereign Guarantees on the Quality of Bank Debt: Theory and Evidence from Europe
Arturo Estrella and Sebastian Schich
13. An Insurance Approach for Preventing Financial Crises
Michael Faure and Klaus Heine
14. Transforming Bailouts into Investments: A Proposal for the Creation of the Federal Government Investment Corporation
Jeffrey Manns
PART IV: SOVEREIGN DEBT ISSUES
15. The Treatment of Contingent Liabilities in a Sovereign Debt Restructuring
Lee C. Buchheit and Mitu Gulati
16. The European Stability Mechanism: Some Notes on a New EU Institution Designed to Avert Financial Crises
Rodrigo Olivares-Caminal
17. Liquidity Spillovers in Credit Markets During the Eurozone Crisis
Giovanni Calice, Jing Chen and Julian Williams
Index
