Crisis : cause, containment and cure

This book provides analysis of the current financial/economic crisis from the Director of the Banking Sector at the FSA (Financial Services Authority). This new edition is updated to take into account the current changes in regulation and legislation in the US, EU and UK. Many of these changes were in line with the recommendations made in the original edition. Analysis of the current financial/economic crisis from the Director of the Banking Sector at the FSA (Financial Services Authority). New edition updated to take account of changes in regulation and legislation in the US, EU and UK. Many of these changes were in line with the recommendations made in the original edition. Crisis: Cause, Containment and Cure explains how the global financial crisis of 2007 came about, how it was contained and what steps should be taken to prevent such a crisis from happening again. Written by a Member of the Executive Committee at the Financial Services Authority, it gives a first hand view of policy-making combined with rigorous economic analysis presented in an easily readable style. It is analytical -- not anecdotal -- based on up-to-date economic theory and recent policy pronouncements, including both macroeconomic and financial sector aspects. Enhanced with diagrams to illustrate key concepts, this book will be a valuable resource for banks, central banks, public policy makers, banking regulators, law firms, trade associations, finance ministries, students of banking, finance and monetary economics and indeed anyone who seeks a balanced, comprehensive, global authoritative view of the crisis. This new edition - is updated to take account of changes in regulation, including decisions of the Basel Committee to revamp capital and liquidity regulation as well as legislative changes in the US, EU and the UK. Many of these changes were in line with the recommendations made in the original edition. - incorporates developments in resolution, including the author's original research and policy work. - provides more extensive treatment of macro-policy including the tasks facing systemic risk boards. - expands the conclusion to consider the broader impact of the financial reform agenda on the financial sector and the economy as a whole. - incorporates further research into the costs of the crisis and the causes of the crisis Crisis: Cause, Containment and Cure explains how the global financial crisis of 2007 came about, how it was contained and what steps should be taken to prevent such a crisis from happening again. Written by a Member of the Executive Committee at the Financial Services Authority, it gives a first hand view of policy-making combined with rigorous economic analysis presented in an easily readable style. It is analytical 6 not anecdotal 6 based on up-to-date economic theory and recent policy pronouncements, including both macroeconomic and financial sector aspects. Enhanced with diagrams to illustrate key concepts, this book will be a valuable resource for banks, central banks, public policy makers, banking regulators, law firms, trade associations, finance ministries, students of banking, finance and monetary economics and indeed anyone who seeks a balanced, comprehensive, global authoritative view of the crisis. This new edition - is updated to take account of changes in regulation, including decisions of the Basel Committee to revamp capital and liquidity regulation as well as legislative changes in the US, EU and the UK. Many of these changes were in line with the recommendations made in the original edition. - incorporates developments in resolution, including the author's original research and policy work. - provides more extensive treatment of macro-policy including the tasks facing systemic risk boards. - expands the conclusion to consider the broader impact of the financial reform agenda on the financial sector and the economy as a whole. - incorporates further research into the costs of the crisis and the causes of the crisis Cover......Page 1 Half Title......Page 2 Also by......Page 3 Title......Page 4 Copyright......Page 5 Contents......Page 6 List of Figures......Page 7 List of Tables......Page 9 Acknowledgements......Page 10 Preface to the Second Edition......Page 11 Introduction......Page 12 Part I Cause......Page 14 1 Rational Exuberance......Page 16 2 Too Much of aGood Thing......Page 26 Part II Containment......Page 52 3 Conditional Containment......Page 54 4 Moving towards Meltdown......Page 77 5 Unconditional Containment......Page 93 Part III Cure......Page 112 6 Better Macroeconomic Policy......Page 114 7 Better Resolution......Page 126 8 Better Deposit Guarantee Schemes......Page 156 9 Better Regulation......Page 168 10 Better Supervision......Page 194 Conclusion......Page 210 Notes......Page 228 References......Page 237 Index......Page 250

This book provides analysis of the current financial/economic crisis from the Director of the Banking Sector at the FSA (Financial Services Authority). This new edition is updated to take into account the current changes in regulation and legislation in the US, EU and UK. Many of these changes were in line with the recommendations made in the original edition.

Rational exuberance Too much of a good thing Containment Conditional containment Moving towards meltdown Unconditional containment Cure Better macroeconomic policy Better resolution Better deposit guarantee schemes Better regulation Better supervision.