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La stabilité du secteur bancaire : gérer la négociabilité et la complexité

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  • Arnoud W. A. Boot
  • Matej Marinč

Abstract

This paper focuses on the proliferation of financial innovations as a decisive force affecting the stability of the financial services industry. A fundamental feature of more recent financial innovations is their focus on augmenting marketability which makes banks and financial markets more intertwined. We argue that the more intertwined nature of banks and financial markets adds complexity and induces opportunistic decision making and herding. In doing so, it has exposed banks to the boom and bust nature of financial markets and has augmented instability. Building on this, the paper discusses whether capital regulation and market discipline might be effective at countering the elevated instability. We will argue that market forces might be at odds with financial stability and point at institutional and regulatory changes that might be needed. In particular, structural remedies are advocated in order to reduce the complexity of financial institutions. Classification JEL: G01, G10 G21, G24, G28.

Suggested Citation

  • Arnoud W. A. Boot & Matej Marinč, 2012. "La stabilité du secteur bancaire : gérer la négociabilité et la complexité," Revue d'économie financière, Association d'économie financière, vol. 0(2), pages 171-194.
    • Handle: RePEc:cai:refaef:ecofi_106_0171
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    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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