Systemic risk, macro-prudential regulation and organizational diversity in banking

Abstract

Since the 2007-2008 global banking crisis, systemic risk has become the central target of policy design in banking regulation in many countries. At the same time, a growing attention has been paid to the systemic importance of bank heterogeneity. The need for diversity has even found its way into official policy documents, both at the European and national level. However, most of the new thinking on the regulatory reforms targeting systemic risk has been conducted within the framework of macro-prudential regulation, which may not be adequate to deal with diversity-related causes of systemic risk. This paper aims, therefore, at contributing to the growing literature on the relationship between systemic risk and banking regulation by (i) explicating the links between systemic risk and banking diversity; (ii) discussing the adequacy of macro and micro-prudential policy instruments to address diversityrelated causes of systemic risk in banking; and (iii) laying out a basic framework for diversity-enhancing policies.

To change banks or bankers? Systemic political (in)action and post-crisis banking reform in the UK and the Netherlands

“…https://www.finance-watch.org/the-continuous-fling-withinvestment-banking/. 8 Butzbach (2016). 9 Several scholars have examined the politics of capital requirements, both nationally and internationally.…”

Characterising Corruption by Adopting a Systemic Risk Perspective: Importing Macro Prudential Financial Regulation into the Policy Debate

“…There is a broad consensus regarding the two dimensions of systemic risk: the time dimension and the cross-sectional dimension. 51 The time dimension of systemic risk refers to the cyclicality of the business cycle, and how systemic risk builds up and evolves pro-cyclically over time. The cross-sectional dimension refers to the distribution of systemic risk at any point in time.…”

The Bank of International Settlements as a think tank for financial policy-making

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