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This stimulating and original Handbook offers an updated and systematic discussion of the relationship between central banks, financial regulation and supervision after the global financial crisis.
The crisis has raised new questions about the compatibility of monetary and financial stability, which are changing the face of central banking and its relationships with the architecture of financial regulation and supervision. The Handbook explores on both the economics and political economy of the topic, in order to understand how and why reforms of the role of the central banks can be designed and implemented. The general suggestion is that future effectiveness of the central banking architecture will depend on its ability to ensure the consistency between the monetary actions in normal and extraordinary times. Consequently the possible paths in the central bank strategies and tactics, as well as in the classic concepts of independence, accountability and transparency, are analyzed and discussed.
With chapters written by outstanding scholars in economics, this lucid Handbook will appeal to academics, policymakers and practitioners, ranging from central bankers and supervisory authorities to financial operators. Among the academics it would be of particular interest to financial and monetary economists (including postgraduate students), but the institutional slant and the central theme of relations between economics, institutional settings and politics will also be invaluable for political scientists.
Introduction
Sylvester Eijffinger and Donato Masciandaro
PART I: CENTRAL BANKING, REGULATION AND SUPERVISION
1. Central Banks and the Financial System
Francesco Giavazzi and Alberto Giovannini
2. Monetary Policy Lessons from the Crisis
Athanasios Orphanides
3. Reflections on the Crisis and on its Lessons for Regulatory Reforms and for Central Bank Policies
Alex Cukierman
4. The Lender of Last Resort: Liquidity Provision versus the Possibility of Bailout
Rob Nijskens and Sylvester Eijffinger
5. Transparency is Not Enough: Central Bank Governance as the Next Frontier
Pierre L. Siklos
6. Central Banks and Banking Supervision Reform
Pierre C. Boyer and Jorge Ponce
7. Institutional Structure and Effectiveness of Central Banks during the Financial Crisis: An Empirical Analysis
Yiwei Fang, Iftekhar Hasan and Loretta J. Mester
8. New Advantages of Tying One’s Hands: Banking Supervision, Monetary Policy and Central Bank Independence
Lucia Dalla Pellegrina, Donato Masciandaro and Rosaria Vega Pansini
9. How Should Central Banks Deal with a Financial Stability Objective? The Evolving Role of Communication as a Policy Instrument
Benjamin Born, Michael Ehrmann and Marcel Fratzscher
10. Time Varying Monetary Policy Rules and Financial Stress
Jaromír Baxa, Roman Horváth and Borek Vašícek
PART II: THE ARCHITECTURE OF REGULATION AND SUPERVISION
11. Defining and Measuring Systemic Risk
Sylvester Eijffinger
12. Financial Regulation
Charles A.E. Goodhart
13. Out-of-the-Box Thoughts about the International Financial Architecture
Barry Eichengreen
14. Safe and Sound Banking: A Role for Countercyclical Regulatory Requirements?
Gerard Caprio
15. Quality of Financial Sector Regulation and Supervision Around the World
Martin Cihák and Alexander Tieman
16. Regulating the Regulators: The Changing Face of Financial Supervision Architectures Before and After the Financial Crisis
Donato Masciandaro and Marc Quintyn
17. Will They Sing the Same Tune? Measuring Convergence in the New European System of Financial Supervisors
Donato Masciandaro, Maria J. Nieto and Marc Quintyn
18. How Do Joint Supervisors Examine Financial Institutions?
Marcelo Rezende
19. Credit Rating Agencies
Jakob De Haan and Fabian Amtenbrink
Index
Sylvester Eijffinger, CentER, European Banking Center and TiasNimbas Business School, Tilburg University and CEPR and Donato Masciandaro, Department of Economics and Paolo Baffi Centre, Bocconi University and SUERF
‘This Handbook is a must read for policy makers and practitioners alike as well as excellent reading for advanced academic courses in international banking.’
– Allard Bruinshoofd, SUERF
‘This collection of papers is essential reading for anyone interested in central banking, regulation and supervision. Sylvester Eijffinger and Donato Masciandaro have brought together contributions from the leading academics, central bankers and regulators, providing the most up-to-date analysis of this critical subject.’
– Paul Mizen, University of Nottingham, UK
