首页
登录
职称英语
Talk is cheap when it comes to solving the problem of too-big-to-fail banks.
Talk is cheap when it comes to solving the problem of too-big-to-fail banks.
游客
2024-11-26
21
管理
问题
Talk is cheap when it comes to solving the problem of too-big-to-fail banks. From the luxury of even today’s stuttering economic recovery it is easy to vow that next time lenders’ losses will be pushed onto their creditors, not onto taxpayers.
But cast your mind back to late 2008. Then, the share prices of the world’s biggest banks could halve in minutes. Reasonable people thought that many firms were hiding severe losses. Anyone exposed to them, from speculators to churchgoing custodians of widows’ pensions, tried to yank their cash out, causing a run that threatened another Great Depression. Now, imagine being sat not in the observer’s armchair but in the regulator’s hot seat and faced with such a crisis again. Can anyone honestly say that they would let a big bank go down?
And yet, somehow, that choice is what the people redesigning the rules of finance must try to make possible. The final rules are due in November and will probably call for banks in normal times to carry core capital of at least 10% of risk-adjusted assets. This would be enough to absorb the losses most banks made during 2007-2009 with a decent margin for error.
But that still leaves the outlier banks that in the last crisis, as in most others, lost two to three times more than the average firm. Worse, the crisis has shown that if they are not rescued they can topple the entire system. That is why swaggering talk of letting them burn next time is empty. Instead, a way needs to be found to impose losses on their creditors without causing a wider panic the financial equivalent of squaring a circle.
America has created a resolution authority that will take over failing banks and force losses on unsecured creditors if necessary. That is a decent start, but may be too indiscriminate. The biggest banks each have hundreds of billions of dollars of such debt, including overnight loans from other banks, short-term paper sold to money-market funds and bonds held by pension funds. Such counterparties are likely to run from any bank facing a risk of being put in resolution which, as the recent crisis showed, could mean most banks. Indeed, the unsecured Adebt market is so important that far from destabilising it, regulators might feel obliged to underwrite it, as in 2008.
A better alternative is to give regulators draconian power but over a smaller part of banks’ balance-sheets, so that the panic is contained. The idea is practical since it means amending banks’ debt structures, not reinventing them, although banks would need roughly to double the amount of this debt that they hold. It also avoids too-clever-by-half trigger mechanisms and the opposite pitfall of a laborious legal process. Indeed, it is conceivable that a bank could be recapitalised over a weekend.
The banks worry there are no natural buyers for such securities, making them expensive to issue. In fact they resemble a bog-standard insurance arrangement in which a premium is received and there is a small chance of perhaps one in 50 each year of severe losses. Regulators would, though, have to ensure that banks didn’t buy each other’s securities and that they didn’t all end up in the hands of one investor. Last time round American International Group became the dumping ground for Wall Street’s risk and had to be bailed out too.
Would it work? The one thing certain about the next crisis is that it will feature the same crushing panic, pleas from banks and huge political pressure to stabilise the system, whatever the cost. The hope is that regulators might have a means to impose losses on the private sector in a controlled way, and not just face a binary choice between bail-out or oblivion. [br] The government can’t take bank crisis for granted mainly because
选项
A、it may lead to the incredible damage.
B、it may cause a wider panic.
C、banks lose more than average firms.
D、it often happen during depression.
答案
A
解析
转载请注明原文地址:https://tihaiku.com/zcyy/3861600.html
相关试题推荐
Talkischeapwhenitcomestosolvingtheproblemoftoo-big-to-failbanks.
Talkischeapwhenitcomestosolvingtheproblemoftoo-big-to-failbanks.
Language-basedlearningdisabilitiesareproblemswithage-appropriateread
Language-basedlearningdisabilitiesareproblemswithage-appropriateread
Language-basedlearningdisabilitiesareproblemswithage-appropriateread
Language-basedlearningdisabilitiesareproblemswithage-appropriateread
Language-basedlearningdisabilitiesareproblemswithage-appropriateread
Language-basedlearningdisabilitiesareproblemswithage-appropriateread
Oneoftheobviousproblemswithpredictingthefutureeffectsofclimatech
Oneoftheobviousproblemswithpredictingthefutureeffectsofclimatech
随机试题
ASocioculturalApproachtoReading,
Accordingtotheauthor,thebrandyouuseapparentlyrevealsyoursocialstatus
[originaltext]Humanbeingsarecuttingdowntheworld’srainforestsatthe
【教学过程】 环节一:导入新课 教师播放BBC关于基督教历史纪录片的节选视频,提问学生:基督教主要包括哪些教派? 学生根据视频资料回答:天主教、东正
A.关元、气海 B.合谷、太冲 C.十宣、气海 D.内关、百会 E.十二
并联运行时的两台有载调压变压器,升压操作时可以同时操作。
任何教育模式要产生一定效果,必须符合教学基本原则,尊重人类识记、运用知识的客观规
2010年,天津市全市生产总值突破9000亿元。据初步核算,并经国家统计局评估审
在房地产开发项目经济评价中,选择评价的基础参数时,一般将运营成本占毛租金收入比率
某工业项目及其中Ⅰ车间的有关建设费用如下表所示,则Ⅰ车间应分摊的生产工艺设计费应
最新回复
(
0
)