Description
Book SynopsisThe financial crisis that began in 2007 in the United States swept the world, producing substantial bank failures and forcing unprecedented state aid for the crippled global financial system. Bringing together three leading financial economists to provide an international perspective, Balancing the Banks draws critical lessons from the causes of th
Trade ReviewJean Tirole, Winner of the 2014 Nobel Prize in Economics "This compact but powerful book by three internationally recognized European economists is well worth reading. The authors offer a thoughtful review of the current global financial crisis and a number of considered recommendations for ameliorating the next and inevitable one."--Choice "Balancing the Banks, by three French economists, focuses on what went wrong with financial regulation and how it can be strengthened. It offers an excellent appreciation of the intrinsic dilemmas involved in regulating financial institutions, along with an explanation of why regulation is necessary, and addresses, among other topics, how to deal with distressed banks. The book provides a useful non-American view of the financial system, with lessons from practices in European countries."--Foreign Affairs
Table of ContentsAcknowledgments vii Chapter 1: Introduction by Mathias Dewatripont, Jean-Charles Rochet, and Jean Tirole 1 Regulation in a Historical Perspective 1 To Regulate or Not to Regulate? 3 The Challenges Facing Prudential Regulation 6 Building an Adaptive Regulatory System in a Global World 7 Keeping a Balance 8 Chapter 2: Lessons from the Crisis by Jean Tirole 10 Part I: What Happened? 11 Part II: How Should the Financial System Be Reformed? 47 Chapter 3: The Future of Banking Regulation by Jean-Charles Rochet 78 The Basel Accords 78 The Breakdown of the Basel Prudential Regime 86 The Necessary Reforms 100 Chapter 4: The Treatment of Distressed Banks by Mathias Dewatripont and Jean-Charles Rochet 107 Reforming Prudential Policy for Distressed Banks 110 Macroeconomic and Systemic Considerations 118 International Cooperation 122 References 131 Index 137
