Jean-Pierre Danthine, (2017), “Leverage and limited liability: A toxic cocktail”, VoxEU,21 Νοεμβρίου
There is little debate that one of the main causes of the Global Crisis was excessive risk-taking by large international financial institutions. Most observers would also agree that much has been accomplished under Basel III to address the problem. Banks today are required to have more and better equity capital, they are required to prepare ‘recovery and resolution plans’ (RRPs), and they must finance themselves through debt instruments that are bail-in-able or can be converted into equity (contingent convertibles, or Cocos). Bank owners and their creditors thus have significantly more ‘skin in the game’ than before the crisis. But is it enough?
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- Wouter den Haan, Martin Ellison, Ethan Ilzetzki, Michael McMahon, Ricardo Reis, (2017), «Global risks from rising debt and asset prices: Views of leading economists» , VOX, 16 Οκτωβρίου
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