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Views on non-Normal markets [73]

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Bullet points include: Regulation part and parcel of financial services provision. Although money has two different uses: ‘medium of exchange’ and ‘store of value’. How might we avoid undue pro-cyclicality? Dynamic provisioning, e.g. Spain, involving higher capital requirements when economy strong, relaxed when weak? Catastrophe insurance, e.g. Kashyap, Rajan and Stein (2008), banks incentivised to have in place contingent funding arrangements from deep-pocketed ‘insurers’ such as pension funds or sovereign wealth funds. Maybe the only deep enough pocket is the government. C.f. large natural catastrophe insurance coverage tends to revert back to state

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