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To gain from trade, modern economies rely on a stable financial system. In
many countries around the world, the benefits of finance are taken for
granted. Financial stability comes to the forefront only in times of crisis.
The global financial crisis of 2008 and 2009 exposed some of the regulatory
and market failures of a more and more globally organized financial system and
led to far-reaching discussions about a broad range of academic and policy
issues on the regulation of financial services.
Against this background, this edited volume brings outstanding expertise and
provides insightful perspectives from nineteen authors with diverse
backgrounds, including officials from international organizations, national
regulators, and commercial banking, as well as academics in law, economics,
political economy, and finance. The authors not only shed light on the causes
of the financial turmoil, but also present thoughtful proposals that
contribute to the future policy debate, and discuss opportunities that
financial services can offer in funding activities which raise standards of
living through initiatives in microfinance, renewable energy, and food
distribution.
The contributions to this volume tackle several of the thorniest issues of
financial regulation in a post-crisis environment, such as:
• the mechanics of contagion within the financial system and the role of
liquidity; • moral hazard when large financial institutions are no longer
subject to the disciplinary effects of bankruptcy; • bank capital
requirements; • management compensation; • design of bank resolution schemes;
• a function-centric versus institution-centric regulatory approach; •
subsidization and compatibility of stimulus packages with EU rules on state
aid; • trade finance and the role of the GATS prudential carve-out; and • the
role of financial services in promoting human rights or combating climate
change.
While the debate about regulatory reform has just begun and will inevitably be
characterized by controversies, it will be vital to appreciate the
interconnected nature of the financial system. Without effective coordination
of regulatory responses to financial crises, tackling the pressing challenge
to limit cross-border contagion in times of crisis without jeopardizing the
benefits of financial globalization is almost certainly doomed to failure.
About the Editors
List of Contributors
List of Figures
List of Tables
List of Boxes
Preface
Acknowledgements
List of Abbreviations
Financial Regulation at the Crossroads
Panagiotis Delimatsis & Nils Herger
Part I Financial Stability and Banking Regulation
Chapter 1 The Impact of Cross-Border Exposures on Financial Contagion
Hans Degryse, Muhammad Ather Elahi & Maria Fabiana Penas
Chapter 2 In the Quest of Systemic Externalities: A Review of the
Literature
Wolf Wagner
Chapter 3 Bank Resolution: A Conceptual Framework
Thorsten Beck
Part II Institutional and State Responses to the Recent Financial Crisis
Chapter 4 Too Big, Too Interconnected and Too International to Resolve?
How to Deal with Global Financial Institutions in Crisis
Eva Hüpkes
Chapter 5 Regulating Credit Rating Agencies in the European Union
Fabian Amtenbrink & Jakob de Haan
Chapter 6 Bailouts in the Financial Sector: The Compatibility with
the EU State Aid Rules
Leigh Hancher
Chapter 7 Sovereign Debt Restructuring in the EU: Lessons from the
Recent Crisis
Kern Alexander
Part III Myths and Realities: The Role of Regulation and Market Discipline
Chapter 8 Breaking Up Mega-Banks: A New Regulatory Model for the
Separation of Commercial Banking from Investment Banking
Emilios Avgouleas
Chapter 9 Rethinking Market Discipline in Banking: Lessons from the
Financial Crisis
Constantinos Stephanou
Part IV Financial Services Regulation: WTO and Preferential Trade
Perspectives
Chapter 10 Trade, Trade Finance, and Financial Crises
Nils Herger
Chapter 11 The GATS Prudential Carve-Out
Juan Marchetti
Chapter 12 Financial Services in Free Trade Agreements: The Case of
Switzerland
Christian Pauletto & Christoph König
Part V ‘New’ Issues in the Regulation of Financial Services
Chapter 13 Financial Regulation in the Aftermath of the Global
Financial Crisis from a Human Rights Perspective: Microfinance Matters
Nicola Jägers
Chapter 14 Promoting Renewable Energy through Adaptive Prudential
Regulation in Financial Services
Panagiotis Delimatsis
Epilogue
Chapter 15 Two Peas in a Pod: Thoughts on the Future Regulation of
Global Food and Finance
Judson Osterhoudt Berkey
Index