You are here: Home Knowledge Base Economy Coping with Systemic Risk Solutions Find an internationally coherent definition of “systemic importance” (meaning “too big and complex to fail”).
Symposium 2011

Solution for Coping with Systemic Risk

The Challenge

The global financial crisis has revealed how systemic risk in the banking system can lead to huge economic downturns. Many of the problems leading to the crisis have been discussed and many suspects h ...

The global financial crisis has revealed how systemic risk in the banking system can lead to huge economic downturns. Many of the problems leading to the crisis have been discussed and many suspects have been identified (including investment banks, central banks, rating agencies, regulators and the economics profession).

Find an internationally coherent definition of “systemic importance” (meaning “too big and complex to fail”).

More regional and international coordination in the supervision of SIFIs is necessary. It is obvious that a globalized, interconnected financial system cannot be regulated efficiently using regional or national patchwork solutions. What is required is an internationally agreed-upon quantitative definition of SIFIs.

    Related Solutions

    Solution
    Symposium 2011

    Central banks’ objectives should include not only price stability but also financial stability.

    Central banks’ objectives should include not only price stability but also financial stability.

    Central banks’ objectives should include not only price stability but also financial stability.

    Polity
    Solution
    Symposium 2011

    Regulators should collect more data on financial transactions to assess the repercussions of financial defaults.

    Regulators should collect more data on financial transactions to assess the repercussions of financial defaults.

    Regulators should collect more data on financial transactions to assess the repercussions of financial defaults.

    Polity, Civil Society
    Solution
    Symposium 2011

    Regulate shadow banks along the same lines as commercial banks.

    Regulate shadow banks along the same lines as commercial banks.

    Regulate shadow banks along the same lines as commercial banks.

    Polity
    Solution
    Symposium 2011

    Impose minimum standards on loans (loan-to-value and debt-to-income) to reduce excessive borrowing.

    Impose minimum standards on loans (loan-to-value and debt-to-income) to reduce excessive borrowing.

    Impose minimum standards on loans (loan-to-value and debt-to-income) to reduce excessive borrowing.

    Polity, Business