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The Role of the State in Managing and Forestalling Systemic Financial Crises: Some Issues and Perspectives

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  • Charles Adams

Abstract

This paper reviews recent state interventions in financial crises and draws lessons for crisis management. A number of areas are identified where crisis management could be strengthened, including with regard to the tools and instruments used to involve the private sector in crisis resolution (with a view to reducing the recent enhanced role of official bailouts and the associated moral hazard), to allow for the orderly resolution of systemically important financial firms (to make these firms “safe to fail†), and with regard to achieving better integration with ex ante macroprudential surveillance. The paper proposes the establishment of high level systemic risk councils (SRCs) in each country with responsibility for overseeing systemic risk in both tranquil times and crisis periods and coordinating the activities of key government ministries, agencies, and the central bank. [ADBI Working Paper 242]

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  • Charles Adams, 2010. "The Role of the State in Managing and Forestalling Systemic Financial Crises: Some Issues and Perspectives," Working Papers id:2923, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:2923
    Note: Institutional Papers
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    References listed on IDEAS

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    1. Mr. G. Russell Kincaid & Mr. Charles Collyns, 2003. "Managing Financial Crises: Recent Experience and Lessons for Latin America," IMF Occasional Papers 2003/001, International Monetary Fund.
    2. Barth,James R. & Caprio,Gerard & Levine,Ross, 2008. "Rethinking Bank Regulation," Cambridge Books, Cambridge University Press, number 9780521709309, January.
    3. Mr. Fabian Valencia & Mr. Luc Laeven, 2008. "Systemic Banking Crises: A New Database," IMF Working Papers 2008/224, International Monetary Fund.
    4. Michael Pomerleano & William Shaw, 2005. "Corporate Restructuring : Lessons from Experience," World Bank Publications - Books, The World Bank Group, number 7373.
    5. Boorman, Jack & Lane, Timothy & Schulze-Ghattas, Marianne & Bulir, Ales & Ghosh, Atish R. & Hamann, Javier & Mourmouras, Alex & Phillips, Steven, 2000. "Managing financial crises: the experience in East Asia," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 53(1), pages 1-67, December.
    6. Reinhart, Carmen M. & Rogoff, Kenneth S., 2013. "Banking crises: An equal opportunity menace," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4557-4573.
    7. Swati R. Ghosh, 2006. "East Asian Finance : The Road to Robust Markets," World Bank Publications - Books, The World Bank Group, number 7063.
    8. Mr. Marc G Quintyn & Mr. David S. Hoelscher, 2003. "Managing Systemic Banking Crises," IMF Occasional Papers 2003/005, International Monetary Fund.
    9. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
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    Cited by:

    1. Morgan, Peter J. & Lamberte , Mario, 2012. "Strengthening Financial Infrastructure," ADBI Working Papers 345, Asian Development Bank Institute.

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    Keywords

    state; financial crises; crisis management; instruments; financial; government ministries; agencies; central bank;
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