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
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Objekttyp
- Arbeitspapier
Beteiligte
- den Butter, Frank A.G.
- Tinbergen Institute
Entstanden
- 2010