Globalization And Systemic Risk

by Douglas D Evanoff, George G Kaufman, David S Hoelscher

Overview

The impact of globalization of financial markets is a highly debated topic, particularly in recent months when the issue of globalization and contagion of financial distress has become a focus of intense policy debate. The papers in this volume provide an up-to-date overview of the key issues in this debate. While most of the contributions were prepared after the initial outbreak of the current global turmoil and financial crisis, they identify the relative strengths of the risk diversification and risk transmission processes and examine the empirical evidence to date. The book considers the relative roles of banks, nonbank financial institutions and capital markets in both risk diversification and risk transmission. It then evaluates the current status of crisis resolution in a global context, and speculates where to go from here in terms of understanding, resolution, prevention and public policy.

Product Details

ISBN-13:	9789812833372
Publisher:	World Scientific Publishing Company, Incorporated
Publication date:	01/06/2009
Series:	World Scientific Studies In International Economics , #6
Pages:	456
Product dimensions:	6.10(w) x 9.00(h) x 1.20(d)

Table of Contents

Preface v

Acknowledgments vii

I Special Addresses 1

Through the Looking Glass: The Links between Financial Globalization and Systemic Risk John Lipsky 3

The Current Financial Crisis: Will Latin America Be Caught in the Web, Again? Guillermo A. Calvo 11

Remarks on Systemic Risk and the International Lender of Last Resort Frederic S. Mishkin 27

The Crisis of 2007: The Same Old Story, Only the Players Have Changed Michael D. Bordo 39

II Current State of Financial Globalization 51

Financial Globalization and Stability Falko Fecht Hans-Peter Grüner Philipp Hartmann Marco Lo Duca 53

Does Financial Integration Improve Countries' Growth Opportunities? Gianni De Nicolò 85

Financial Globalization in the Asian Region Philip Lowe 97

The Current State of Financial Globalization-Good News, and Bad Gerard Caprio 113

III Globalization and Systemic Risk-Theory 119

Incentive Conflict in Central Bank Responses to Sectoral Turmoil in Financial Hub Countries Edward J. Kane 121

Systemic Risk and Prudential Regulation in the Global Economy Xavier Freixas 145

The Broad Yen Carry Trade Hyun Song Shin Masazumi Hattori 169

Systemic Risk in a Global Context: Comment on Freixas, Hattori and Shin, and Kane Richard J. Herring 191

IV Globalization and Systemic Risk-Nonbank Financial Intermediaries 205

Remarks on Globalization and Systemic Risk: Nonbank Financial Intermediaries Julian Adams 207

Globalization Duality and Nonbank Financial Intermediaries Mohamed A. E-Erian 217

Pension Plans and Systemic Risk Dennis E. Logue 225

V Globalization and Systemic Risk-Banks 231

International Integration, Common Exposure and Systemic Risk in the Banking Sector Nicole Allenspach Pierre Monnin 233

The Systemic Risk Implications of Originate and Distribute Andrew G. Haldane 251

Quantitative Modeling of Systemic Risk in a Globalized Banking System: Methodological Challenges Martin Summer 275

Globalization and Systemic Risk Grant Spencer 291

VI Globalization and Systemic Risk-Capital Markets 297

The Sub-Prime Crisis and Systemic Risk: Evidence from US Securities Markets Leonce Bargeron Kenneth Lehn Mehmet Yalin 299

Systemic Risks in Our Global Marketplace Chester S. Spatt 313

What Can Central Bankers Learn from Hedge Fund Replication Strategies? David A. Hsieh 331

Comments on Session VI: Globalization and Systemic Risk-Capital Markets Liliana Rojas-Suarez 349

VII Crisis Resolution in a Global Context 355

Global Crisis Management John Lane 357

EU Financial-Stability Framework: Analytical Benchmarks for Assessing Its Effectiveness Maréa J. Nieto Garry J. Schinasi 361

Crisis Resolution in a Global Context: Regulation and Supervision for Cross-Border Banking Mattias Persson 379

Crisis Resolution in a Global Context Pascual O 'Dogherty 389

VIII Where to Go from Here-Policy Panel 395

Speaking Points for Where to Go from Here? Policy Panel Jaime Caruana 397

The US Government's Approach to Financial Decisions Kenneth W. Dam 403

Globalization and Systemic Risk: Where to Go from Here-Policy Panel William L. Rutledge 409

Comments on Session VIII: Where to Go from Here-Policy Panel Andrew Sheng 415

Basel II, Regulation and the Sub-Prime "Crisis" Michael W. Taylor 429

International Agenda 437

Index 441