30 posts in this category
The growing use of artificial intelligence (AI) poses difficult challenges for the financial authorities. AI allows private-sector firms to optimise a…
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Systemic financial risk has both internal and external drivers. So, when we focus too strongly on preventing internal crises, such as the 2008 Global …
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Climate risk is not a systemic financial risk. Folding it into financial regulations will likely backfire, not mitigate climate damage and even increa…
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Financial institutions are rapidly embracing AI – but at what cost to financial stability? This column argues that AI introduces novel stability risks…
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Financial crises usually inflict the most damage when banks suddenly shift from pursuing profits to survival. This column argues that such drastic beh…
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Artificial intelligence can act to either stabilise the financial system or to increase the frequency and severity of financial crises. This second co…
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The rapid adoption of artificial intelligence is transforming the financial industry. This first of a two-column series argues that AI may either incr…
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As artificial intelligence makes inroads into the financial system, it exacerbates existing channels of instability and creates new ones. This column …
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The use of artificial intelligence in the private sector is accelerating, and the financial authorities have no choice but to follow if they are to re…
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The downfall of Silicon Valley Bank and Credit Suisse has exposed failures in how we regulate the financial system. This column argues that the proble…
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The collapse of Silicon Valley Bank shows that banks still pose risks. Are they systemic? While it is unlikely that the failure of SVB will lead to a …
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Financial regulations are vital. But do they give us what we need?
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The relationship between financial risk and economic growth is complex. This column finds that perceptions of high risk unambiguously harm growth, whi…
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While the direct economic consequences of Covid-19 have been significant, the impact on the financial markets has been more nuanced. This column uses …
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The new postcrisis financial regulations, for example Basel III, have the unfortunate side effect of favouring the largest banks relative to the small…
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Regulations change behaviour and outcomes. It is seductively attractive to say that someone misbehaves, therefore we need the rule to prevent the mis…
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Keynote speech at the bank of Lithuania on "Should macroprudential policy target real estate prices?"
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Political risk is a major cause of systemic financial risk. This column argues that both the integrity and the legitimacy of macroprudential policy, o…
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One often hears from Brexit supporters that too many regulations come from Brussels, that it would be much better if we could regulate ourselves.…
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Suppose one cares about tail risk, what is the best way to estimate it? There are two, not mutually exclusive, ways; statistical and structural. Whi…
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Some financial authorities have proposed designating asset managers as systemically important financial institutions (SIFIs). This column argues that …
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I have been in a conference for the past few days, and have seen a few presentations on macropru type regulations.
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LSE report warns that forcing financial institutions to forecast risk in the same way could mean they will all end up being caught unawares.
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This column introduces a new Vox eBook collecting some of the best Vox columns on financial regulations, starting with the fundamentals of financial r…
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Basel III is coming into focus. The fundamental logic of the regulatory changes seems sensible, but the devil is in the detail - empirical implementa…
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Is the fact that different banks have different risk models problematic? Contrary to the Basel Committee and the European Banking Authority, this colu…
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Many are calling for significant new financial regulations. This column says that if the regulate everything that moves crowd has its way, we will rep…
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Much of today's financial regulation assumes that risk can be accurately measured so that financial engineers, like civil engineers, can design safe p…
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Complex financial models and intricate assets structures meant extraordinary profits before the crisis. Markets for structured products became overly …
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