Can Consolidated Supervision Deter Shadow Banking?

2016 ◽  
pp. 30-45
Author(s):  
Rituparna Das ◽  
Harish C. Chandan
Keyword(s):  
North America ◽  
Central Banks ◽  
Shadow Banking ◽  
Financial Systems ◽  
Regulatory Arbitrage

This chapter analyzes the business of shadow banking practiced by non banking financial companies that are subsidiaries of bank-groups or conglomerates across the continents. The central banks want to stop shadow banking because it has hidden regulatory arbitrage in it that can create distortions and additional risks to the financial systems. Three countries - one each from Belgium in Europe, Canada in North America and China in Asia in addition to USA and UK along with India are taken as cases in this chapter. This chapter inquires into whether consolidated supervision can work as a way out of the problem of shadow banking.

Regulation and Regulators, 1993–2006

2020 ◽  
pp. 267-297
Author(s):  
Ranald C. Michie
Keyword(s):  
Financial Markets ◽  
Central Banks ◽  
Data Handling ◽  
Financial Systems ◽  
Settlement Systems ◽  
The Face ◽  
Implicit Belief ◽  
National Boundaries ◽  
Financial Transactions

By the 1990s the combination of internal deregulation and globalization led to a spectacular growth in the value of financial transactions both inside countries and across borders. There was a commensurate increase in pressure on payment and settlement systems to cope with the huge volume and variety of transactions. All this was of concern to those who regulated financial systems around the world. The speed and extent of the changes taking place, assisted by the advances made in the technology of communication and data handling, forced regulators to search for new ways of coping with the consequences, as the methods of the past were becoming inadequate. Globalization meant that national boundaries could no longer define the parameters within which financial systems operated, as all became integrated into international flows of short-term money and long-term finance. The complexities arose not only from the process of globalization and technological change but also from the disappearance of the barriers that had long separated different components within national financial systems. Rather than serving separate communities banks and financial markets increasingly competed with each other. In the face of these enormous changes regulators turned to the megabanks as a safe and secure way of monitoring and policing global financial markets. There was an implicit belief that the size and sophistication of these megabanks had made them to big to fail or even require the central banks to play a role as lenders of last resort.

scholarly journals Theoretical and Empirical Research on The Analysis and The Assessment of The Stability of National Financial Systems. Romania’s Experience

2017 ◽  
Vol 23 (2) ◽  
pp. 124-129
Author(s):  
Leontin Stanciu ◽  
Liliana-Mioara Stanciu
Keyword(s):  
Sustainable Development ◽  
Empirical Research ◽  
National Economy ◽  
Financial Stability ◽  
Central Banks ◽  
The Other ◽  
Financial Systems ◽  
The Sustainable Development ◽  
Regulatory Authorities ◽  
The Stability

Abstract The stability of the financial systems is an objective necessity for the sustainable development of each national economy. Within this framework, ensuring financial stability is a priority for the central banks and for the other macro-prudential supervisory and regulatory authorities. In order to ensure the stability and "the health" of the national financial system, the competent authorities should analyze, assess and adopt optimal and timely measures to eliminate potential imbalances. These and other aspects are the main objectives of our research.

Open Market Operations

2019 ◽  
pp. 435-454
Author(s):  
Jan Toporowski
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Central Banks ◽  
Transmission Mechanism ◽  
Policy Framework ◽  
Monetary Transmission ◽  
Quantitative Easing ◽  
Open Market ◽  
Financial Systems

Open market operations are the buying and selling of securities by the central bank. Such operations differ from discount operations in that open market operations are undertaken at the initiative of the central bank rather than a commercial bank. Historically, such trading of securities has predated the setting of interest rates. The emergence of long-term finance and complex financial systems has extended the range of securities in which central banks may deal. Open market operations depend on the policy framework set by the central bank. But such operations are not necessary for the setting of interest rates. Such operations are often undertaken when the monetary transmission mechanism from interest rates appears to have failed, as in the case of recent quantitative easing operations. In general, open market operations have proved effective in times of banking or financial crisis.

Global Banking Regulation

2019 ◽  
Author(s):  
Howard Davies ◽  
Maria Zhivitskaya
Keyword(s):  
Early Development ◽  
Legal Status ◽  
Banking Regulation ◽  
Central Banks ◽  
The Political ◽  
Regulatory Arbitrage ◽  
Basel Committee ◽  
Global Banking ◽  
International Banks ◽  
The Face

Global banking regulation, in the sense of setting common capital standards for international banks, has a forty-year history. Its early development reflected the instincts for cooperation on the part of central banks in the face of rapidly integrating global firms and for a time was highly effective and adaptive. The informality of the Basel Committee and its absence of legal status were seen as advantages, allowing agreements to be reached below the political radar. But the move from “by and large” guidelines to a detailed corpus of regulation applying to all banks has shown the limitations of a voluntarist approach, and there are signs that further progress toward common standards, evenly enforced, has stalled in the face of domestic political imperatives. That raises fundamental questions about the need for treaty underpinning of international financial standards, so far seen as too politically difficult, to guard against regulatory arbitrage.

Regulation and Regulators, 1970–92

2020 ◽  
pp. 108-129
Author(s):  
Ranald C. Michie
Keyword(s):  
Financial Markets ◽  
Banking Sector ◽  
Central Banks ◽  
Financial Systems ◽  
Financial Flows ◽  
Financial Activity ◽  
Markets And Institutions ◽  
Divide And Rule ◽  
National Boundaries ◽  
Formal Controls

Before 1970 regulators had relied on the principle of divide and rule as a way of keeping financial systems in order. What this meant in practice was that even in market-based economies authority was exercised behind national boundaries, aided by controls on international financial flows, and by insisting upon a degree of internal compartmentalization not only between banks and markets but also within the banking sector. By the 1970s it was becoming apparent that a growing proportion of financial activity was taking place away from those centres, markets, and institutions over which regulators could exercise some control. The result led governments to abandon formal controls and regulators to search for ways of supervising financial markets. Increasingly the solution was seen to lie with the megabanks as they had the capacity to monitor and police their own behaviour, and were closely supervised by central banks.

scholarly journals A comparative analysis of models selected as a response to the world financial crisis

2009 ◽  
Vol 61 (3) ◽  
pp. 244-273
Author(s):  
Hasiba Hrustic
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
World Economy ◽  
Central Banks ◽  
Economic Recovery ◽  
Economic Downturn ◽  
Financial Systems ◽  
Comprehensive Plan ◽  
The World ◽  
Entire World

The financial crisis has hit the entire world economy. Many governments have been forced to rescue the financial systems, having as their priority to ensure economic recovery. A number of important measures have been taken to promote financial stability, including injection of capital into financial organizations, a substantial expansion of guarantees for bank liabilities by central banks, the recapitalization and the various liquidity programmes. However, the recovery has required a comprehensive plan to stabilize the financial system and restore normal flows of credit. The ultimate goal of the governments' activities has been to avoid a protracted economic downturn and restore the conditions for economic growth. .

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