scholarly journals The future of global financial stability

European View ◽  
2010 ◽  
Vol 9 (1) ◽  
pp. 23-27
Author(s):  
Mario Draghi
Keyword(s):  
Emerging Economies ◽  
Financial Stability ◽  
Current Crisis ◽  
High Quality ◽  
Global System ◽  
Quality Regulation ◽  
Current Economic Crisis ◽  
Financial Governance ◽  
Fundamental Shift ◽  
Global Financial System

The current economic crisis has revealed the shortcomings of the current global financial system, and it is clear that there must be a fundamental shift in the approaches to global financial governance. The seeds for a more comprehensive global system have been sown, as evidenced by the increasing amount of international dialogue, not only amongst the global economic giants but also amongst emerging economies. However, there is a need to develop mechanisms for high-quality regulation rather than falling into the trap of reacting to the current crisis.

The inter-relationships among liquidity creation, bank capital and credit risk: evidence from emerging Asia–Pacific economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tu D.Q. Le ◽  
Xuan T.T. Pham
Keyword(s):  
Credit Risk ◽  
Emerging Economies ◽  
Financial Stability ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Capital Requirements ◽  
Asia Pacific ◽  
Bank Capital ◽  
Content Type ◽  
Small Banks

PurposeThis study investigates the inter-relationships among liquidity creation, bank capital and credit risk in selected emerging economies between 2012 and 2016.Design/methodology/approachA three-step procedure as proposed by Berger and Bouwman (2009) is used to measure liquidity creation. Thereafter, a simultaneous equations model with the generalized method of moments (GMM) estimator is used to examine the links between liquidity creation, bank capital and credit risk.FindingsThe findings indicate that bank capital and credit risk affect each other positively after controlling for liquidity creation. Also, the findings show a negative impact of credit risk on liquidity creation while our findings do not find any evidence to confirm the reverse relationship between them. Furthermore, the findings demonstrate a two-way negative relationship between liquidity creation and bank capital in these emerging economies. Finally, the results indicate a positive relationship between capital and credit risk, especially in the case of small banks in the sample.Practical implicationsThe findings suggest that the trade-off between the benefits of financial stability induced by tightening capital requirements and those of improved liquidity creation has crucial implications for policymakers and bank regulators in making the banking system more resilient. A positive impact of capital on credit risk emphasizes that the authorities in selected emerging economies should put more attention on small banks to ensure their exposures under target control.Originality/valueThis is the first study that examines the dynamic interrelationships among liquidity creation, bank capital and credit risk in the Asia–Pacific region.

Governance of the Global Financial System: The Legitimacy of the BCBS 10 years after the 2008 Crisis

2019 ◽  
Vol 22 (2) ◽  
pp. 247-260
Author(s):  
Jose Gustavo Prieto Muñoz
Keyword(s):  
Financial Stability ◽  
International System ◽  
Financial System ◽  
Public Law ◽  
Social Rights ◽  
Banking Supervision ◽  
The Public ◽  
Basel Committee ◽  
External Dimension ◽  
Global Financial System

ABSTRACT This article explores the question of legitimacy that underpins Basel III. First, I present a general framework for assessing how legitimacy operates within the global financial system through an analysis of the internal and external dimensions. I next address the internal dimension, exploring the legitimacy of the Basel Committee on Banking Supervision (BCBS) as a body that exercises a type of public authority through the generation of norms/standards. I then analyse how the public law standards of transparency and accountability are currently being implemented within the BCBS system. Finally, I examine the external dimension, considering how the legitimacy of the BCBS is related to the international system. In particular, it is argued that because of the direct link between bailouts and human rights violations, the legitimacy of the BCBS is also tied to its role in promoting financial stability in the post-crisis architecture by protecting social rights within states.

scholarly journals Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on Framework for Audit Quality, Consultation Paper by the International Auditing and Assurance Standards Board

2013 ◽  
Vol 7 (2) ◽  
pp. C11-C22 ◽  
Author(s):  
Sebahattin Demirkan ◽  
Nancy Chun Feng ◽  
Natalia Mintchik ◽  
Mikhail Pevzner ◽  
Gregory Sierra
Keyword(s):  
Doctoral Students ◽  
Financial Stability ◽  
Audit Quality ◽  
Economic Stability ◽  
Related Information ◽  
Design Attributes ◽  
Implementation Communication ◽  
Global Financial System ◽  
Consultation Paper

SUMMARYOn January 15, 2013, the International Auditing and Assurance Standards Board (IAASB) solicited public comments on the exposure draft of its consultation paper entitled A Framework for Audit Quality (the Framework). The four-month comment period ended on May 15, 2013. This commentary summarizes the contributors' views on this exposure draft (the exposure draft and related information are available at: http://www.ifac.org/publications-resources/framework-audit-quality).This consultation paper makes great strides toward meeting the IAASB's strategy of “enhancing the quality of assurance” and “supporting global financial stability.” The three-by-three design (attributes of audit quality coupled with engagement, firm, and national levels; see page 24 of the Framework) and detailed outline of inputs, outputs, context, and interactions provides practitioners, regulators, and other stakeholders with a common audit-quality roadmap for implementation, communication, and research agendas. As financial systems continue to become more integrated, the Framework supports the global financial system and economic stability by providing worldwide coordination of the expectations of auditors, regulators, investors, and other stakeholders. We also believe that the Framework should be of great use to auditing academics and doctoral students, both as a teaching and research tool. Summarized below are our specific comments on specific issues raised in the consultation paper.

High-quality regulation: its popularity, its tools and its future

2009 ◽  
Vol 29 (3) ◽  
pp. 145-152 ◽  
Author(s):  
Martin Lodge ◽  
Kai Wegrich
Keyword(s):  
High Quality ◽  
Quality Regulation

scholarly journals The future of international banking regulations in response to the financial crisis of 2007/2009: After Basel III then what next?

2014 ◽  
Vol 4 (2) ◽  
pp. 28-53 ◽  
Author(s):  
Joseph E. Isebor
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Stability ◽  
Basel Iii ◽  
International Banking ◽  
The Great Depression ◽  
Banking Regulations ◽  
Basel Accords ◽  
The Future ◽  
Global Financial System

The financial crisis 2007-2009 will not be forgotten in a hurry because of its impact on the global financial system almost replicating the Great Depression. Major and causal factors contributed to the financial crisis, and this prompted the establishment of Basel III to contain the crisis. Basel III introduced improved capital and liquidity rules, but still could not contain the crisis. This leaves regulators with questions of how to prevent another financial crisis in the future. Evidences suggest that the financial market is evolving because of its complex and changing nature, and so are the international banking regulations (Basel I, Basel II and Basel III) that support the system in terms of maintaining economic and financial stability. It is clear that Basel III will not stop the next financial crisis even though the Basel accords continue to evolve in response to maintaining economic and financial stability, with the core purpose of preventing another financial crisis. Uncertainties lies ahead, and regulators cannot be sure of what will likely cause the next crisis, but indications suggest that the financial markets and international banking regulations in the form of Basel accords will continue to evolve.

scholarly journals The Fund's Response to the 2007-08 Financial Crisis - Stocktaking and Collaboration with the Financial Stability Forum

Policy Papers ◽  
2008 ◽  
Vol 2008 (56) ◽  
Author(s):  
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Initial Assessment ◽  
Executive Directors ◽  
Policy Responses ◽  
Policy Frameworks ◽  
World Economic ◽  
Global Financial System ◽  
Economic Outlook

The present financial crisis is testing the resilience of the global financial system as well as the robustness of national and multilateral policy frameworks. As requested by Executive Directors, this paper reviews recent progress in meeting these challenges, focusing on the role of the Fund and its collaboration with the Financial Stability Forum (FSF). In concert with other international bodies, the Fund has sought to promote appropriate policy responses to the financial turmoil, including through its report on The Recent Financial Turmoil—Initial Assessment, Policy Lessons, and Implications for Fund Surveillance, in the Global Financial Stability Report (GFSR) and the World Economic Outlook (WEO), as well as in recent Article IV consultations and Financial Sector Assessment Programs (FSAPs). The Fund has also responded to the International Monetary and Financial Committee’s (IMFC) call for closer collaboration with other international fora, including by supporting the implementation of policy lessons from the crisis, such as the 67 FSF recommendations issued in April 2008.

scholarly journals Global Financial Stability Report, October 2019

2019 ◽  
Author(s):  
Keyword(s):  
Institutional Investors ◽  
Financial Stability ◽  
Sovereign Debt ◽  
Management Practices ◽  
Financial System ◽  
Debt Management ◽  
Corporate Debt ◽  
Market Economies ◽  
External Borrowing ◽  
Global Financial System

The October 2019 Global Financial Stability Report (GFSR) identifies the current key vulnerabilities in the global financial system as the rise in corporate debt burdens, increasing holdings of riskier and more illiquid assets by institutional investors, and growing reliance on external borrowing by emerging and frontier market economies. The report proposes that policymakers mitigate these risks through stricter supervisory and macroprudential oversight of firms, strengthened oversight and disclosure for institutional investors, and the implementation of prudent sovereign debt management practices and frameworks for emerging and frontier market economies.

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