Th e main objective of this paper is to highlight the importance of the fi nancial stability of the global fi nancial system particularly aft er the recent global fi nancial crisis of 200809. Th e major causes of diff erent fi nancial crises possess the same pattern of greed among investors, ineffi ciency of government regulators, central banks and other stakeholders. Th ey have miserably faile...

It is a pleasure to participate in this meeting and to speak about the lessons for monetary policy the current crisis is teaching us. The big difference between the current crisis with previous ones in emerging economies is that this time “it was not our fault.” The evidence on the performance of emerging countries facing an unprecedented global downturn shows that some lessons have been proper...

Although widespread industry consolidation over recent decades has resulted in a decline in the number of smaller banks, there has been little overall increase in various indicators of concentration. Technological and regulatory change suggest that ongoing consolidation will continue to reduce the number of smaller banks, and that large multinational banks will play an increasing role in domest...

This paper evaluates the welfare implications of monetary policy rules when international financial markets are incomplete. Using a two-country dynamic general equilibrium monetary model, we evaluate the magnitude of the costs of imperfect risk sharing. Under a price stability policy in both countries, they are in the range of 0.07-0.70 percent of a permanent shift in steady-state consumption. ...

This review of the book “The Challenge of Financial Stability: A New Model and its Applications” 2 by Goodhart C.A.E. and Tsomocos D.P. highlights the potential of the framework of strategic partial default of banks with credit chain on the interbank market for further theoretical and applied research on financial stability.

To date, regulatory bank stress testing in the United States has focused on ensuring the banking system is resilient to losses in one or a few stress scenarios that involve macro-economic weakness, but it is unclear how far this resilience extends beyond the stress scenarios considered. In addition, a theory of which stress-scenarios should be chosen to achieve systemic-risk reduction objective...

It is an honour to be here today at the University of Sydney delivering the eighteenth R.C. Mills Memorial Lecture. It is customary to start a Memorial Lecture by paying homage to the person in whose memory the lecture is held, but I would like to break with tradition and do that a little later where it fits in more naturally. On nearly every occasion when I speak before an audience such as thi...