Ghosh, Saibal (2001): Financial Stability and Public Policy: An Overview. Published in: Reserve Bank of India Occasional Papers No. 1 (January 2001): pp. 109-131.
Download (94kB) | Preview
The paper reviews the sources of market failure in financial institutions and markets and what can be done to alleviate them. It examines game-theoretic explanations for financial instability, in particular the role of asymmetric information in generating destabilizing behavior. In the area of remedies, the paper analyses the potential contribution of official safety nets and what can be done to minimize the associated moral hazard. It discusses the role of public policy in this context.
|Item Type:||MPRA Paper|
|Original Title:||Financial Stability and Public Policy: An Overview|
|Keywords:||financial stability; financial institutions; financial markets; financial infrastructure|
|Subjects:||G - Financial Economics > G0 - General > G00 - General
G - Financial Economics > G0 - General > G01 - Financial Crises
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E60 - General
|Depositing User:||Saibal Ghosh|
|Date Deposited:||07. Jan 2010 09:20|
|Last Modified:||07. May 2014 08:55|
Banerjee, A.V. (1992): “A Simple Model of Herd Behaviour”, Quarterly Journal of Economics, 107, 797-817.
Bank for International Settlements, Annual Report, various years.
Brash, Don, T (1997): “Banking Soundness and the Role of the Market”, in C.Enoch and J.H.Green (eds.) Banking Soundness and Monetary Policy, International Monetary Fund, Washington D.C.
Cordella, T and E.L.Yeyeti (1997): “Public Disclosures and Bank Failures”, IMF Working Paper No. 96, IMF: Washington D.C.
Corrigan, G. E.(1996): “A Perspective on Recent Financial Disruptions”, Federal Reserve Bank of New York Quarterly Review, 14, 8-15.
Crockett, A (1997): “Why is Financial Stability a Goal of Public Policy?”, in Financial Stability in a Global Economy, Federal Reserve Bank of Kansas City, Wyoming, USA.
Davis, P.E. (1996): Debt, Financial Fragility and Systemic Risk, Oxford, Oxford University Press.
Davis, P.E., R.Hamilton, R.Heath, F.Mackie and A.Narain (1999): Financial Market Data for International Financial Stability, Centre for Central Banking Studies, Bank of England: London.
Demirgic-Kunt, A and E.Detragiache (1998): “The Determinants of Banking Crises in Developing and Developed Countries”, IMF Staff Papers, 45, 81-109.
Dewartipont, M. and J.Tirole (1994): The Prudential Regulation of Banks, Cambridge, MA, MIT Press.
Diamond, D. (1984): “Financial Intermediation and Delegated Monitoring”, Review of Economic Studies, 51, 393-414.
Drage, J and F.Mann. (1999): “Improving the Stability of the International Financial System”, Financial Stability Review, June, Bank of England: London, 40-77.
Eichengreen, B. (1999): “Kicking the Habit: Moving from Pegged Rates to Greater Exchange Rate Flexibility”, Economic Journal, 109, C1-C14.
Eichengreen, B., A.Rose, and C.Wyplosz (1993): “Exchange Market Mayhem: The Antecedents and Aftermath of Speculative Attacks”, Economic Policy, 27, 251-311.
Eichengreen, B., A.Rose, and C.Wyplosz (1996): “Currency Crashes in Emerging Markets; Empirical Indicators”, NBER Working Paper No.5437, New York, NBER.
Fischer, I (1933): “The Debt-Deflation Theory of Great Depressions”, Econometrica, 1, 337-357.
Frankel, J and A.K.Rose (1997): “Currency Crashes in Emerging Markets: An Empirical Treatment”, Journal of International Economics, 41, 351-366.
Friedman, M (1959): A Program for Monetary Stability, New York, Fordham University Press.
Friedman, M and A.J..Schwartz (1963): A Monetary History of the United States 1867-1960, New York, NBER.
Goldstein, M (1996): The Case for an International Banking Standard, Institute for International Finance, Washington, D.C.
Goldstein, M (1997): “Commentary” on F.S.Mishkin “Causes and Propagation of Financial Instability: Lessons for Policymakers”, in Financial Stability in a Global Economy, Federal Reserve Bank of Kansas City, Wyoming, USA.
Gonzalez-Hermosillo, B (1999): “Determinants of Ex-ante Banking System Distress: A Micro Macro Empirical Exploration of Some Recent Episodes”, IMF Working Paper No.33, IMF: Washington D.C.
Gonzalez-Hermosillo, B., C.Pazarbasioglu and R.Billings (1997): “Determinants of Banking System Fragility: A Case Study of Mexico”, IMF Staff Paper No.44, 295-314.
Goodhart (1995): “Why Do Banks Need a Central Bank? Should Regulation and Supervision be Separated?” Oxford Economic Papers, 22, 33-48.
Goodhart, C (1998a): “Financial Globalisation, Derivatives, Volatility and the Challenge for the policies of Central Banks”, in C.Goodhart (ed.) The Emerging Framework of Financial Regulation, Central Banking Publications Ltd., U.K.
Goodhart, C (1998b): “Some Regulatory Concerns”, in C.Goodhart (ed.) The Emerging Framework of Financial Regulation, Central Banking Publications Ltd., U.K.
Greenwald, B and J.E.Stiglitz (1991): “Information, Finance and Markets: The Architecture of Alternative Mechanisms”, NBER Working Paper 3652, NBER, Cambridge, MA
Guttentag, J.M. and R.J.Herring (1984): “Credit Rationing and Financial Disorder”, Journal of Finance, 39, 1359-1382.
Harwood, A. and B.L.R..Smith (1997): Sequencing? Financial Strategies for Developing Economies, Brookings Institution Press, Washington, D.C.
Hellwig, M (1995): “Systemic Aspects of Risk Management in Banking and Finance”, Swiss Journal of Economics and Statistics, 131, 723-737.
Honohan, P (1997): “Banking System Failures in Developing and Transition Countries: Diagnosis and Predictions”, BIS Working Paper No.39, Basle, Switzerland.
International Monetary Fund, World Economic Outlook, various years.
Jalan, B (1999): “International Financial Architecture: Developing Countries Perspectives”, 49th Anniversary Lecture delivered at Central Bank of Sri Lanka.
Jalan, B (1999): “Towards a More Vibrant Banking System”, RBI Bulletin, January, 11-20.
Journal of Foreign Exchange and International Finance (1999) Stability of the International Financial System: Some Issues, Commentary, 12, 79-84.
Kaminsky, L. G and C.M. Reinhart(1996):”The Twin Crises; The Causes of Banking and Balance-of-Payments Problems”, International Finance Discussion Paper No.544, Board of Governors of the Federal Reserve, Washington D.C.
Khatkhate, D (1998): “Timing and Sequencing of Financial Sector Reforms: Evidence and Rationale”, Economic and Political Weekly, 33, 1831-1840.
Kindleberger, C.P (1978): Manias, Panics and Crashes: A History of Financial Crises, New York, Basic Books.
King, M.A. (1994): “Debt Deflation: Theory and Evidence”, European Economic Review, 38, 419-445.
King, M.A. (1999): “Reforming the International Financial System: The Middle Way”, Financial Stability Review, Bank of England, November, 203-211.
King, R and R. Levine (1993): “Finance and Growth: Schumpeter Might be Right”, Quarterly Journal of Economics, 108, 717-737.
Litan R.E. (1987): What Should Banks Do? The Brookings Institution, Washington, D.C.
Litan R.E. (1997): “Institutions and Policies for Maintaining Financial Stability”, in Financial Stability in a Global Economy, Federal Reserve Bank of Kansas City, Wyoming, USA.
Mishkin, F.S. (1994): “Preventing Financial Crises: An International Perspective”, NBER Working Paper No.4636, NBER, New York.
Reddy, Y.V. (1999): “Corporate Governance in Financial Sector”, RBI Bulletin, August, 993-1004.
Scharfstein, D.C. and J.C.Stein (1990): “Herd Behaviour and Investment”, American Economic Review, 80, 465-479.
Schwartz, A.J. (1986): “Real and Pseudo Financial Crises”, in E.Altman and A.W.Sametz (eds.) Financial Crises, New York, Wiley.
Stiglitz, J.E. and A.Weiss (1983): “Incentive Effects of Terminations: Applications to Labour and Credit Markets”, American Economic Review, 73, 912-927.
Sundararajan, P and T.Balino (1991): Banking Crises: Cases and Evidence, International Monetary Fund, Washington, D.C.
Van Damme, E (1993): “Banking: A Survey of Recent Microeconomic Theory”, Oxford Review of Economic Policy, 10, 14-33.
White, W.R. (1999): “Evolving International Financial Markets: Some Implications for Central Banks”, BIS Working Paper No.66, BIS: Switzerland.