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The retreat from systemic risk regulation:
what explains it?
(and why it was predictable)

By John C. Coffee, Jr.
November 2018 - Réalités Industrielles
Financial crises usually trigger a predictable cycle: first, a populist outburst that produces dramatic legislative and regulatory changes and, then, a slower counter-reaction as the financial industry gradually subjects the new reforms to a death by a thousand cuts, often with the result that little remains. This cycle - here called the “Regulatory Sine Curve” - can be traced back to the South Sea Bubble in ...
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Delegating Regulation: European Union
and Financial Markets

By Sharyn O’HALLORAN, Karen CHEN and al.
November 2018 - Réalités Industrielles
This paper analyzes the design of financial regulatory structure in the European Union. We develop a two-pronged approach to track changes in decision-making authority in EU financial market regulations and directives enacted from 1964 to the present. Traditional observational data collection methods manually code laws to identify the amount of discretionary authority delegated to ...
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Can post-crisis regulation help mitigate the risks created by systemic institutions?

By Olivier de Bandt
August 2018 - Réalités Industrielles
The 2008 crisis was marked by large-scale government interventions to rescue systemic institutions. Injections of capital to some institutions have increased public deficits and, although they curtailed the impact of systemic shock, they fostered moral hazard. Systemic financial institutions are defined here as institutions with a "systemic impact", that is, those whose difficulties...
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Including macro-prudential strategies
in Euro-area macroeconomic policy

By Agnès Bénassy-Quéré
August 2018 - Réalités Industrielles
In the wake of the 2008 financial crisis and especially the euro area crisis, several innovations – including macro-prudential policies and a macroeconomic imbalance procedure – were included in Europe's economic policy structure. However, their coordination and surveillance mechanisms could be better interconnected. The goal, instruments, horizon and summary...
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Learning small lessons from a great crisis

By Jean-François Boulier
August 2018 - Réalités Industrielles
In the words of Nietzsche, “What does not kill me, makes me stronger.  But are we really stronger after having emerged from this great crisis? Have we learned all there is to learn? How can we prepare for the next crisis that is sure to happen one day? I believe that now is the time to step back and try to take a more positive look at these historic events.
...
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Banks and tax havens
By Vincent Bouvatier, Gunther Capelle-Blancard
and Anne-Laure Delatte
August 2018 - Réalités Industrielles
Since the 2008 financial crisis, a string of scandals – UBS in 2008, Offshore Leaks in 2013, Lux Leaks in 2014, Swiss Leaks in 2015, Panama Papers and Football Leaks in 2016, Paradise Papers in 2017 – have brought to light the role played by banks in tax avoidance, money laundering, setting up shell companies, and circumventing international regulations. ...
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Crisis and cooperative solutions:
the euro area since 2008

By Jérôme Creel
August 2018 - Réalités Industrielles
Since the European integration process began, the European Union has always moved forward in fits and starts, from one crisis to the next. But, the most-recent crisis showed up fault lines in its economic governance.
The euro area was seriously affected by the US banking crisis which started in September 2008.
...
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Preventing systemic risk

By Jean-François Lepetit
August 2018 - Réalités Industrielles
The 2008-2011 crisis provided a rationale for regulating credit intermediation by banks, which reduces, as much as possible, the risk that such intermediation will result in a systemic crisis. This is a welcome outcome. However, ring-fencing the banking function has expanded the role of market intermediation under conditions that make this mode of credit intermediation ...
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The complexity of the regulatory response
to the crisis

By Pierre-Charles Pradier
August 2018 - Réalités Industrielles
While the 2008 financial crisis originated and first erupted in the United States, the response was organised on a global scale. After Lehman Brothers filed for bankruptcy on 15 September and an emergency bailout plan for AIG was announced the next day, the G7 Finance Ministers meeting scheduled for October seemed to be too little, too late for Gordon Brown, Angela Merkel and Nicolas Sarkozy, ...
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The majority of the articles published here were translated from French to English by the Translation Centre of the French economy and finance ministries.
The remaining articles were translated by Noal Mellott.