Financial Regulation and the Speed of Financial Risks
Bibliographic Data
| ID | 13034764 |
|---|---|
| Authors | Ralph Chami (International Monetary Fund, corresponding author), Thomas F Cosimano (0000-0002-0035-3522, University of Notre Dame), Connel Fullenkamp (Duke University), Céline Rochon (International Monetary Fund) |
| Year | 2017 |
| Volume | 7-2 |
| Pages | 161-190 |
| Publication date | 2017-01-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | OEconomia (JOURNAL) |
| Journal identifiers | ISSN: 2113-5207 • E-ISSN: 2269-8450 |
| Publisher | Association Œconomia (PUBLISHER • FR) |
| DOI | 10.4000/oeconomia.2669 |
| OpenAlex | W2761335447 |
| Language | EN |
| References cited | 15 |
This paper argues that the speed of financial risks, rather than the speed of regulators, is the key cause of financial crises. Our argument contradicts a common claim in the literature that financial crises arise because regulators cannot keep up with fast-paced changes in financial markets. We divide financial risks into two main types—fast-moving and slow-moving risks—and argue that most crises have been caused by slow-moving risks that regulators could have mitigated. The global financial crisis, however, showed that the mixing of fast-moving and slow-moving risks also leads to financial instability. This paper thus provides a novel argument for limiting risk-taking, potentially including the separation of financial institutions by the types of risk they manage
Argument (complex analysis · Business · Economics · Financial crisis · Financial market · Financial ratio · Financial risk · Financial system · Indirect finance · Limiting · Macroeconomics · Systemic risk · Banking stability, regulation, efficiency · Economic, financial, and policy analysis · Engineering · Global Financial Crisis and Policies · Finance
| Highly cited | No |
|---|