The impact of the repeal of Glass-Steagall Act of 1933 in the context of the current financial crisis
The paper critically examines the impact of the repeal of the Glass-Steagall Act in the context of the current financial crisis. It analyses the pre-Glass-Steagall paradigm, the Glass-Steagall regime and post-repeal paradigm. It discusses the impact of the repeal in specific various forms in this background. It also assesses whether Glass-Steagall should be brought back in its original form, in doing so it offers an alternative approach to deal with the future global financial crisis and it also suggests new rules for the protection of the consumers to avoid moral hazard.
Out of the Corridor: Keynes and the Crisis
We should learn from Keynes to focus on the macroproblems of our day. Today's problem is the financial crisis and the resulting great recession. Neither the standard Keynesian policies of decades past nor the monetary policy doctrine of recent years provides useful solutions. Dynamic stochastic general equilibrium theory is part of the crisis wreckage, but turning to old or to New Keynesian theory will be of little use. A balance sheet recession requires that policy address the problems in the private sector's capital as well as its income accounts. We need serious theoretical work on problems of system stability using, for example, agent-based methods. Monetary theory needs to develop analysis of processes in which intertemporal budget constraints are violated. Network theory will be useful in that quest. Copyright The Author 2009. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.
Competition and Stability in European Banking: A Regional Analysis
National measures of competition and macroeconomic activity have been used by researchers in recent years to explain performance and risk differentials across banks. However, such measures may be inappropriate for banks which operate with a regional focus. In this paper we construct measures of competition and economic activity using regional data to examine bank risk and stability in 11 European countries over the period 2000-2008. The results suggest that a U-shaped relationship exists between regional bank competition and risks. Furthermore, regional economic conditions play a significant role in determining the stability of banks.