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Navigable Slide Index

1. Introduction
2. Financial regulation
3. Why regulate financial institutions?
4. If you can't lick 'em, join em'
5. Risk of failure
6. Reduce asset risk
7. Reduce leverage
8. Regulatory tools?
9. Summary (1)
10. Regulatory systems
11. Traditional supervision (1)
12. Traditional supervision (2)
13. Private investors' information
14. "Market discipline" defined
15. Which market information?
16. Types of "influence"
17. Evidence about market monitoring
18. Monitoring: who knows first?
19. Evidence about market influence
20. Indirect influence
21. Summary (2)
22. Minor caveats
23. More serious caveats
24. Other forms of market discipline
25. Recent lessons
26. Conclusions

Topics Covered

• Governments bear some of the risk taken by financial institutions: formally (as in deposit insurance) or informally (as in support provided during a crisis)
• Much of the financial system's regulatory oversight is best viewed as an effort to control this indirect source of risk to the government and its taxpayers
• Traditional supervision relies on inspections by government personnel, who tend to focus on accounting outcomes
• Market investors also evaluate financial firms' activities
• The resulting market prices (of equity, bonds, deposits, etc.) can supplement the government's traditional supervisory techniques, at least under certain circumstances

Links

Series:

• Effective Risk Based Supervision of Financial Institutions

Categories:

• Finance, Accounting & Economics

Talk Citation

Publication History

• Published on August 30, 2009