Making Banks Safer : Can Volcker and Vickers Do it? / Julian Chow, Jay Surti.

Format:

Book

Government document

Author/Creator:

Chow, Julian.

Contributor:

Surti, Jay.

Series:

IMF Working Papers; Working Paper ; No. 2011/236

IMF Working Papers

Language:

English

Subjects (All):

Banking law--United States.

Banking law.

Banks and banking--State supervision--United States.

Banks and banking.

Banking law--Great Britain.

Banks and banking--State supervision--Great Britain.

Physical Description:

1 online resource (59 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2011.

Language Note:

English

Summary:

This paper assesses proposals to redefine the scope of activities of systemically important financial institutions. Alongside reform of prudential regulation and oversight, these have been offered as solutions to the too-important-to-fail problem. It is argued that while the more radical of these proposals such as narrow utility banking do not adequately address key policy objectives, two concrete policy measures - the Volcker Rule in the United States and retail ring-fencing in the United Kingdom - are more promising while still entailing significant implementation challenges. A risk factor common to all the measures is the potential for activities identified as too risky for retail banks to migrate to the unregulated parts of the financial system. Since this could lead to accumulation of systemic risk if left unchecked, it appears unlikely that any structural engineering will lessen the policing burden on prudential authorities and on the banks.

Contents:

Cover Page; Title Page; Copyright Page; Contents; I. Why Redefine Scope?; II. Narrow Banking Ideas; A. The Utility Banking Proposals; 1. Rescoping of Universal Banking to Utility Banking; Table 1. Utility Banking Proposals; Table 2. Impact Analysis of Utility Banking; B. Narrow Funding Banks (NFBs); III. Full Institutional Separation of Functions: the Volcker Rule; A. Rationale for the Rule; Box 1. Do Trading Activities Increase the Vulnerability of Banks?; Table 3. Results for U.S., European, and Asian LCFIs; B. What Businesses Must Commercial Banks Give Up?

2. Rescoping of Banks' Businesses Under the Volcker RuleTable 4. Volcker Rule of the Dodd-Frank Act; C. Assessment; Table 5. Quantitative Metrics Proposed by FSOC; IV. Functional Subsidiarization: Retail Ring-Fencing; A. Why Ring-fence Retail Banking?; B. Implementation; 3. Rescoping of Bank's Businesses Undwer the ICB Ring-fence; Table 6. Capital Constraints for Ring-fenced Banks; C. Assessment; Table 7. Comparing the Volcker Rule and the ICB Ring-fencing Proposals; V. Policy Implications; 4. Comparing the Proposals: A Summary; VI. References; Footnotes

Notes:

Description based upon print version of record.

Includes bibliographical references.

Description based on online resource; title from PDF title page (ebrary, viewed September 25, 2014).

ISBN:

9786613880895

9781463973070

1463973071

9781463969134

1463969139

9781283568449

1283568446

9781463936990

1463936990