Arbeitspapier

The Macroeconomics of the Credit Crisis: In Search of Externalities for Macro-Prudential Supervision

In the analysis of the credit crisis of 2007-2010 a clear distinction should be made between (i) the initial shock; (ii) the propagation and amplification of the initial shock to the systemic crisis of the financial markets; and (iii) the transmission of the credit crisis to the real economic sector causing a major cyclical downturn now known as the great recession. This paper argues that banking supervision failed to anticipate and repair the market failure that caused the huge amplification of the relatively small initial shock. As the repair of market failure is the only sound economic argument for regulation, banking supervisors should now focus on the externalities that caused the amplification of the shock and use that knowledge for adequate macro-prudential supervision in the future. Macro-economic models can be helpful in this search for externalities. The character and timing of future shocks are unpredictable, but contagion in the propagation mechanisms should be mitigated as much as possible.

Sprache
Englisch

Erschienen in
Series: Tinbergen Institute Discussion Paper ; No. 10-052/3

Klassifikation
Wirtschaft
Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
Central Banks and Their Policies
Corporate Finance and Governance: Government Policy and Regulation
Thema
credit crisis
externalities
macro-prudential supervision
contagion
fallacy of composition
Liquiditätsbeschränkung
Ansteckungseffekt
Kreditgeschäft
Bankenaufsicht
Wirkungsanalyse
Welt

Ereignis
Geistige Schöpfung
(wer)
den Butter, Frank A.G.
Ereignis
Veröffentlichung
(wer)
Tinbergen Institute
(wo)
Amsterdam and Rotterdam
(wann)
2010

Handle
Letzte Aktualisierung
20.09.2024, 08:25 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • den Butter, Frank A.G.
  • Tinbergen Institute

Entstanden

  • 2010

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