Financial Regulation and the Speed of Financial Risks
| Autor: | Ralph Chami, Thomas Cosimano, Connel Fullenkamp, Celine Rochon |
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| Jazyk: | English<br />French |
| Rok vydání: | 2017 |
| Předmět: | |
| Zdroj: | Œconomia, Vol 7, Iss 2, Pp 161-190 (2017) |
| Druh dokumentu: | article |
| ISSN: | 2113-5207 2269-8450 |
| DOI: | 10.4000/oeconomia.2669 |
| Popis: | This paper argues that the speed of financial risks, rather than the speed of regulators, is the key cause of financial crises. Our argument contradicts a common claim in the literature that financial crises arise because regulators cannot keep up with fast-paced changes in financial markets. We divide financial risks into two main types—fast-moving and slow-moving risks—and argue that most crises have been caused by slow-moving risks that regulators could have mitigated. The global financial crisis, however, showed that the mixing of fast-moving and slow-moving risks also leads to financial instability. This paper thus provides a novel argument for limiting risk-taking, potentially including the separation of financial institutions by the types of risk they manage. |
| Databáze: | Directory of Open Access Journals |
| Externí odkaz: |
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