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Global supervision, financial stability and risk control: a banker’s view

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  • D. CROFF

    (Banca Nazionale del Lavoro)

Abstract

Studies have shown that the financial integration of industrial and developing economies can lead to more efficient allocation of resources and to greater aggregate welfare. However, this integration might also lead to greater financial instability in relation to possible massive shifts in capital. This essay considers present global financial trends, and how the international and national financial systems might be better protected from the recurrence of crises. It argues that national and international surveillance and capital requirements should be complemented by risk control models, built and managed by the banks themselves and approved by national surveillance authorities, thus avoiding distortions to market forces and orienting bank managers to more efficient risk management.

Suggested Citation

  • D. Croff, 1999. "Global supervision, financial stability and risk control: a banker’s view," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 52(209), pages 127-147.
    • Handle: RePEc:psl:bnlqrr:1999:21
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    References listed on IDEAS

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    1. Stanley Fischer, 1999. "On the Need for an International Lender of Last Resort," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 85-104, Fall.
    2. Mr. Eric Sidgwick & Mr. Olivier M Frecaut, 1998. "Systemic Banking Distress - The Need for an Enhanced Monetary Survey," IMF Policy Discussion Papers 1998/009, International Monetary Fund.
    3. M.J.B. Hall, 1996. "The amendment to the capital accord to incorporate market risk," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 49(197), pages 271-277.
    4. Curzio Giannini, 1998. ""Enemy of None but a Common Friend of All"? An International Perspective on the Lender-of-Last-Resort Function," Temi di discussione (Economic working papers) 341, Bank of Italy, Economic Research and International Relations Area.
    5. John B. Taylor, 1989. "Policy Analysis With a Multicountry Model," NBER Working Papers 2881, National Bureau of Economic Research, Inc.
    6. Giannini, C., 1998. ""Enemy of None but a Common Friend of All"? An International Perspective on the Lender-of-Last-Resort Function," Papers 341, Banca Italia - Servizio di Studi.
    7. Scott, David H. & EXT, 1994. "The regulation and supervision of domestic financial conglomerates," Policy Research Working Paper Series 1329, The World Bank.
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    Cited by:

    1. Boyer, Robert, 1999. "Two challenges for the twenty-first century: achieving financial discipline and putting the internationalization process in order," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.

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    More about this item

    Keywords

    Risk assessment; Economic stabilisation;

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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