In the aftermath of the financial crisis, new financial market regulation is being implemented, and increasing numbers of countries are establishing new legislation for macroprudential oversight. Against this backdrop, this thought provoking book provides a platform for the leading international experts to discuss and encourage future debate on financial stability. The breadth and scope of the issues addressed reflect the challenge of developing and consistently implementing a coherent set of financial reforms to promote financial stability. The book advocates the development of financial reforms that are effective in striking the optimal balance between realizing the enormous benefits of efficient financial intermediation, capital allocation and risk management on the one hand, and controlling systemic risks and maintaining financial stability on the other. Making an important contribution to deepening our understanding of the many facets of financial stability, this book will prove a challenging read for policy makers, regulators and central bankers as well as for researchers and scholars in the fields of economics, money, finance and banking
Preface Stability of the Financial System - An Introduction Mark Carney PART I: ABOUT FINANCIAL STABILITY 1. Financial and Fiscal Stability Beyond the Crisis Years: Two Paradigm Shifts and their Consequences Martin Blessing 2. Criteria for Financial Stability - The European View Andreas Dombret 3. Criteria for Financial Stability - A US View Nathan Sheets 4. Financial Stability in Brazil Luiz Awazu Pereira da Silva, Adriana Soares Sales and Wagner Piazza Gaglianone 5. From the Stability Pact to ESM - What Next? Claudia M. Buch 6. Economic Convergence - The Need for Economic Cooperation and Coordination Walter Rothensteiner and Valentin Hofstatter 7. Banking System and Financial Stability Andreas Ittner 8. Competition, the Pressure for Returns, and Stability Paul Tucker 9. Measuring Systemic Risk Jaime Caruana PART II: THE CONSEQUENCES OF FINANCIAL INSTABILITY 10. Sovereign Risk Lorenzo Bini Smaghi 11. Default of Systemically Important Financial Intermediaries: Short-Term Stability vs. Incentive Compatibility Yves Mersch 12. Systemically Important Banks - Possible Options for Policy Makers Klaas H.W. Knot and Hanne van Voorden 13. A Paradigm Shift: Resolution of Banks Jean-Pierre Landau 14. Consequences of Financial Shocks for the Real Economy Hiroshi Nakaso PART III: PREVENTION OF FINANCIAL INSTABILITY 15. The Economics of Financial Regulation Ewald Nowotny 16. A Strategic Approach to Post Crisis Regulation - The Need for Pillar 4 David T. Llewellyn 17. Regulation of Banks and the 'Level Playing Field' - The Case of Shadow Banking Otto Lucius 18. Enhancing Financial Stability - A Global Bank's Perspective Ulrich Korner 19. Stable Liquidity and Funding Flows Jose Manuel Campa Fernandez 20. How to Avoid Contagion and Spillover Effects in the Euro Zone? Michael C. Burda 21. The New European Supervisory System - Harmonisation and Macroprudential Oversight Sabine Lautenschlager 22. Macroprudential, Microprudential and Monetary Policies: Conflicts, Complementarities and Trade-Offs Paolo Angelini, Sergio Nicoletti-Altimari and Ignazio Visco 23. Why Central Banks need a Macroeconomic Toolkit Philipp M. Hildebrand 24. Lender of Last Resort - Which Institution Could Best Fulfil this Function? Gertrude Tumpel-Gugerell 25. Stability of the Financial System: Illusion or Feasible Concept? An Epilogue Christine Lagarde Index
