International Financial Instability: Global Banking and National Regulation »

This book explores the potential and problems of bank safety and efficiency arising from the rapidly growing area of cross-border banking in the form of branches or subsidiaries with primarily only national prudential regulation. There are likely to be differences in the treatment of the same bank operating in different countries or of different banks from different home countries operating in the same country with respect to deposit insurance provisions, declaration of insolvency, resolution of insolvencies, and lender of last resort protection. The book identifies these protection problems and discusses possible solutions, such as greater cross-border cooperation, harmonization and organizations.

The contributors to this book include experts from different countries and from a wide range of affiliations, including academia, regulators, practitioners, and international organizations.

Acknowledgements     v
Preface     vii
Special Addresses     1
Cross-Border Banking Regulation - A Way Forward: The European Case   Stefan Ingves     3
Remarks before the Conference on International Financial Instability   Sheila C. Bair     13
Benign Financial Conditions, Asset Management, and Political Risks: Trying to Make Sense of Our Times   Raghuram G. Rajan     19
International Financial Instability: Cross-Border Banking and National Regulation Chicago - Dinner Remarks   Jean Pierre Sabourin     29
Landscape of International Banking and Financial Crises     37
Current State of Cross-Border Banking   Dirk Schoenmaker   Christiaan van Laecke     39
Actual and Near-Miss Cross-Border Crises   Carl-Johan Lindgren     65
A Review of Financial Stability Reports   Sander Oosterloo   Jakob de Haan   Richard Jong-A-Pin     77
Discussion of Landscape of International Banking and Financial Crises   Luc Laeven     97
Causes and Conditions for Cross-Border Instability Transmission and Threats to Stability     107
Cross-Border Contagion Links and Banking Problems in the Nordic Countries   Bent Vale     109
Currency Crises, (Hidden)Linkages, and Volume   Max Bruche   Jon Danielsson   Gabriele Galati     125
What Do We Know about the Performance and Risk of Hedge Funds?   Triphon Phumiwasana   Tong Li   James R. Barth   Glenn Yago     139
Remarks on Causes and Conditions of Financial Instability Panel   Garry Schinasi     167
Prudential Supervision     179
Home Country versus Cross-Border Negative Externalities in Large Banking Organization Failures and How to Avoid Them   Robert A. Eisenbeis     181
Conflicts between Home and Host Country Prudential Supervisors   Richard J. Herring     201
Cross-Border Nonbank Risks and Regulatory Cooperation   Paul Wright     221
Challenges in Cross-Border Supervision and Regulation   Eric Rosengren     233
Government Safety Net     239
Bagehot and Coase Meet the Single European Market   Vitor Gaspar     241
Banking in a Changing World: Issues and Questions in the Resolution of Cross-Border Banks   Michael Krimminger     257
International Banks, Cross-Border Guarantees, and Regulation   Andrew Powell   Giovanni Majnoni     279
Deposit Insurance, Bank Resolution, and Lender of Last Resort - Putting the Pieces Together    Thorsten Beck     299
Insolvency Resolution     309
Cross-Border Resolution of Banking Crises   Rosa Maria Lastra     311
Bridge Banks and Too Big to Fail: Systemic Risk Exemption   David G. Mayes     331
Prompt Corrective Action: Is There a Case for an International Banking Standard?   Maria J. Nieto   Larry D. Wall     355
Insolvency Resolution: Key Issues Raised by the Papers   Peter G. Brierley     373
Cross-Border Crisis Prevention: Public and Private Strategies     385
Supervisory Arrangements, LOLR, and Crisis Management in a Single European Banking Market   Arnoud W. A. Boot     387
Regulation and Crisis Prevention in the Evolving Global Market   David S. Hoelscher   David C. Parker     407
Derivatives Governance and Financial Stability   David Mengle     423
Cross-Border Crisis Prevention: Public and Private Strategies   Gerard Caprio, Jr.     439
Where to from Here: Policy Panel     443
Cross-Border Banking: Where to from Here?   Mutsuo Hatano     445
Remarks on Deposit Insurance Policy   Andrey Melnikov     449
The Importance of Planning for Large Bank Insolvencies   Arthur J. Murton      453
Where to from Here: Policy Panel   Guy Saint-Pierre     459
Some Private-Sector Thoughts on Home/Host-Country Supervisory Issues   Lawrence R. Uhlick     463
Conference Agenda     471
Index     477