ERM Frameworks and Responses to risk [17]

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Bullet points include: Mainly a banking crisis – but note AIG At risk of oversimplifying matters Bank balance sheets overstretched, some business models too reliant on continued access to easy liquidity (e.g. via ‘shadow’ banking system, using repackaged loans as collateral) In hindsight, repackage structures (SIVs, CDOs etc.) were exposed to substantial liquidity risk Crisis solved by injection of liquidity, at significant cost to public purse (and significant risk for Ireland) Regulators / supervisors / governments keen to avoid repeat

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