How Big Banks Fail and What To Do About It?
Speaker
Abstract
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Coming out of the financial crisis of 2007-2009, success in placing our financial system on a sounder footing depends on an understanding of how the largest and most connected banks, the major dealer banks, can make a sudden transition from weakness to failure. The dealer banks are at the center of the plumbing of the financial system. Among many other crucial activities, they intermediate over-the-counter markets for securities and derivatives. Although the financial crisis has passed, the dealer banks remain among the most serious points of weakness in the backbone of the financial system. In How Big Banks Fail, I describe the failure mechanics of dealer banks in clinical detail, and outline improvements in regulations and market infrastructure that are likely to reduce the risks of these failures and reduce the damage they cause to the wider financial system when they do fail. |
| The Erasmus Finance Seminar is jointly sponsored by ERIM and the Tinbergen Institute. |
| Contact information: |
| Viorel Roscovan |
