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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title Systemic risk: changing the regulatory perspective
Organization Unit
  • Jean-Charles Rochet
Item Subtype Original Work
Refereed Yes
Status Published in final form
  • English
Journal Title International Journal of Central Banking
Publisher Federal Reserve Board
Geographical Reach international
ISSN 1815-4654
Volume 6
Page Range 259 - 276
Date 2010
Abstract Text The article puts forward the view that the regulatory perspective on systemic risk should be changed drastically. The sub-prime crisis has indeed revealed many loopholes in the supervisory/regulatory framework for banks—in particular, the inability to deal with the too-big-to-fail syndrome and also the lack of resiliency of interbank and money markets. To a large extent, the contagion phenomena that took place in these markets were the necessary outcomes of the passive attitude of banking supervisors, who have let large banks develop a complex and opaque nexus of bilateral obligations. We propose two reforms: adopting a platform-based (instead of institutionbased) regulatory perspective on systemic risk and encouraging a generalized move to central counterparty clearing.
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