IDEAS home Printed from https://ideas.repec.org/p/ucd/wpaper/201136.html
   My bibliography  Save this paper

Financial and Regulatory Failure: The Case of Ireland

Author

Listed:
  • Kenneth Patrick Vincent O'Sullivan

    (University of Limerick)

  • Stephen Kinsella

    (Department of Economics, College of Business, University of Limerick)

Abstract

The paper chronicles the evolution of financial regulation in Ireland, with particular attention given to the roles, responsibilities and actions of those authorities responsible for maintaining financial stability. It examines the role of financial regulation during the property bubble, in particular, the huge increase in propertybacked lending which fuelled its growth during the mid-2000s. We examine the impact of ongoing government support to the banking system and the damage which has been done to public finances since the banking crisis.

Suggested Citation

  • Kenneth Patrick Vincent O'Sullivan & Stephen Kinsella, 2011. "Financial and Regulatory Failure: The Case of Ireland," Working Papers 201136, Geary Institute, University College Dublin.
    • Handle: RePEc:ucd:wpaper:201136
    as

    Download full text from publisher

    File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201136.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joe Peek & Eric S. Rosengren & Geoffrey M. B. Tootell, 1999. "Is Bank Supervision Central to Central Banking?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 629-653.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "The Aftermath of Financial Crises," American Economic Review, American Economic Association, vol. 99(2), pages 466-472, May.
    3. K.P.V. O’Sullivan & Tom Kennedy, 2008. "Supervision of the Irish Banking System: A Critical Perspective," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(03), pages 20-26, October.
    4. Mr. Fabian Valencia & Mr. Luc Laeven, 2008. "Systemic Banking Crises: A New Database," IMF Working Papers 2008/224, International Monetary Fund.
    5. Thomas Conefrey & John Fitz Gerald, 2010. "Managing Housing Bubbles In Regional Economies Under Emu: Ireland And Spain," National Institute Economic Review, National Institute of Economic and Social Research, vol. 211(1), pages 91-108, January.
    6. Ben S. Bernanke & Cara S. Lown, 1991. "The Credit Crunch," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 205-248.
    7. Bernanke, Ben S & Blinder, Alan S, 1988. "Credit, Money, and Aggregate Demand," American Economic Review, American Economic Association, vol. 78(2), pages 435-439, May.
    8. FitzGerald, John, 2009. "Fiscal Policy for Recovery," Papers WP326, Economic and Social Research Institute (ESRI).
    9. Kashyap, Anil K & Stein, Jeremy C & Wilcox, David W, 1993. "Monetary Policy and Credit Conditions: Evidence from the Composition of External Finance," American Economic Review, American Economic Association, vol. 83(1), pages 78-98, March.
    10. Ben S. Bernanke, 1990. "On the predictive power of interest rates and interest rate spreads," New England Economic Review, Federal Reserve Bank of Boston, issue Nov, pages 51-68.
    11. K.P.V. O'Sullivan & Tom Kennedy, 2010. "What caused the Irish banking crisis?," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 18(3), pages 224-242, July.
    12. Barth, James R. & Caprio, Gerard Jr. & Levine, Ross, 2004. "Bank regulation and supervision: what works best?," Journal of Financial Intermediation, Elsevier, vol. 13(2), pages 205-248, April.
    13. Goodhart, Charles & Schoenmaker, Dirk, 1995. "Should the Functions of Monetary Policy and Banking Supervision Be Separated?," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 539-560, October.
    14. repec:ces:ifodic:v:6:y:2008:i:3:p:14567232 is not listed on IDEAS
    15. Black, Julia, 2008. "Forms and paradoxes of principles-based regulation," LSE Research Online Documents on Economics 23103, London School of Economics and Political Science, LSE Library.
    16. Englund, Peter, 1999. "The Swedish Banking Crisis: Roots and Consequences," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 15(3), pages 80-97, Autumn.
    17. Kevin Keasey & Gianluca Veronesi, 2008. "Lessons from the Northern Rock affair," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 16(1), pages 8-18, February.
    18. Friedman, Benjamin M & Kuttner, Kenneth N, 1992. "Money, Income, Prices, and Interest Rates," American Economic Review, American Economic Association, vol. 82(3), pages 472-492, June.
    19. Peter Temin, 1991. "Introduction to "Inside the Business Enterprise: Historical Perspectives on the Use of Information"," NBER Chapters, in: Inside the Business Enterprise: Historical Perspectives on the Use of Information, pages 1-6, National Bureau of Economic Research, Inc.
    20. International Monetary Fund, 2006. "Ireland: Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 2006/293, International Monetary Fund.
    21. K.P.V. O’Sullivan & Tom Kennedy, 2008. "Supervision of the Irish Banking System: A Critical Perspective," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(3), pages 20-26, October.
    22. International Monetary Fund, 2006. "Iceland: Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 2006/296, International Monetary Fund.
    23. Donato Masciandaro (ed.), 2005. "Handbook of Central Banking and Financial Authorities in Europe," Books, Edward Elgar Publishing, number 3387.
    24. Edward Kane, 1997. "Ethical Foundations of Financial Regulation," Journal of Financial Services Research, Springer;Western Finance Association, vol. 12(1), pages 51-74, August.
    25. M. Pohl, 1994. "Handbook On The History Of European Banks," Books, Edward Elgar Publishing, number 204.
    26. Benston, George J & Kaufman, George G, 1996. "The Appropriate Role of Bank Regulation," Economic Journal, Royal Economic Society, vol. 106(436), pages 688-697, May.
    27. George J. Benston & George G. Kaufman, 1988. "Risk and solvency regulation of depository institutions: past policies and current options," Staff Memoranda 88-1, Federal Reserve Bank of Chicago.
    28. Peter Temin, 1991. "Inside the Business Enterprise: Historical Perspectives on the Use of Information," NBER Books, National Bureau of Economic Research, Inc, number temi91-1.
    29. Black, Julia, 2002. "Critical reflections on regulation," LSE Research Online Documents on Economics 35985, London School of Economics and Political Science, LSE Library.
    30. Lars Jonung, 2008. "Lessons from Financial Liberalisation in Scandinavia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 50(4), pages 564-598, December.
    31. International Monetary Fund, 2006. "Republic of Estonia; Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 06/418, International Monetary Fund.
    32. Honohan, Patrick, 2009. "Resolving Ireland’s Banking Crisis," The Economic and Social Review, Economic and Social Studies, vol. 40(2), pages 207-231.
    33. Levine,Ross Eric, 2004. "The Corporate Governance of Banks - a concise discussion of concepts and evidence," Policy Research Working Paper Series 3404, The World Bank.
    34. Dowd, Kevin, 1996. "The Case for Financial Laissez-Faire," Economic Journal, Royal Economic Society, vol. 106(436), pages 679-687, May.
    35. International Monetary Fund, 2006. "Romania: Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 2006/168, International Monetary Fund.
    36. Parker,Christine, 2002. "The Open Corporation," Cambridge Books, Cambridge University Press, number 9780521818902, September.
    37. Joe Peek & Eric S. Rosengren & Geoffrey M. B. Tootell, 2001. "Synergies between Bank Supervision and Monetary Policy: Implications for the Design of Bank Regulatory Structure," NBER Chapters, in: Prudential Supervision: What Works and What Doesn't, pages 273-300, National Bureau of Economic Research, Inc.
    38. Constantin Gurdgiev & Brian M. Lucey & Ciarán Mac an Bhaird & Lorcan Roche-Kelly, 2011. "The Irish Economy: Three Strikes and You’re Out?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(1), pages 19-41, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "The Aftermath of Financial Crises," American Economic Review, American Economic Association, vol. 99(2), pages 466-472, May.
    2. Abad-González, Julio & Gutiérrez-López, Cristina, 2016. "Modelización de la solvencia bancaria en escenarios adversos: aplicación a los «PIIGS»," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 19(2), pages 227-238.
    3. Kinsella, Stephen, 2019. "Visualising economic crises using accounting models," Accounting, Organizations and Society, Elsevier, vol. 75(C), pages 1-16.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anil K. Kashyap & Jeremy C. Stein, 1994. "Monetary Policy and Bank Lending," NBER Chapters, in: Monetary Policy, pages 221-261, National Bureau of Economic Research, Inc.
    2. Honohan, Patrick & Donovan, Donal & Gorecki, Paul & Mottiar, Rafique, 2010. "The Irish Banking Crisis: Regulatory and Financial Stability Policy," MPRA Paper 24896, University Library of Munich, Germany.
    3. Stijn Claessens & M Ayhan Kose, 2018. "Frontiers of macrofinancial linkages," BIS Papers, Bank for International Settlements, number 95.
    4. Robert M. Stern, 2011. "Trade in Financial Services—Has the IMF been Involved Constructively?," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 5(1), pages 65-92, February.
    5. Repullo, Rafael & Suarez, Javier, 2000. "Entrepreneurial moral hazard and bank monitoring: A model of the credit channel," European Economic Review, Elsevier, vol. 44(10), pages 1931-1950, December.
    6. Mr. Manmohan S. Kumar & Mr. Dennis P Botman, 2007. "Global Aging Pressures: Impact of Fiscal Adjustment, Policy Cooperation, and Structural Reforms," IMF Working Papers 2007/196, International Monetary Fund.
    7. Franck, Raphaël & Krausz, Miriam, 2008. "Why separate monetary policy from banking supervision?," Journal of Comparative Economics, Elsevier, vol. 36(3), pages 388-411, September.
    8. International Monetary Fund, 2007. "Russian Federation: Selected Issues," IMF Staff Country Reports 2007/352, International Monetary Fund.
    9. Nguyen Tra Ngoc Vy, 2016. "Does Profitability affect Debt Ratio? Evidence from Vietnam Listed Firms," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 1(2), pages 87-100, October.
    10. Rossiter, R. D., 1995. "Monetary policy indicators after deregulation," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(2), pages 207-223.
    11. Al-Mashat Rania & Billmeier Andreas, 2008. "The Monetary Transmission Mechanism in Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 4(3), pages 32-82, September.
    12. Fernando Barran & Virginie Coudert & Benoît Mojon, 1995. "Taux d'intérêt, spreads, comportement bancaire : les effets sur l'activité réelle," Revue Économique, Programme National Persée, vol. 46(3), pages 625-634.
    13. Rochelle Belkar & Lynne Cockerell & Christopher Kent, 2008. "Current Account Deficits: Tha Australian Debate," Central Banking, Analysis, and Economic Policies Book Series, in: Kevin Cowan & Sebastián Edwards & Rodrigo O. Valdés & Norman Loayza (Series Editor) & Klaus Schmidt- (ed.),Current Account and External Financing, edition 1, volume 12, chapter 13, pages 491-535, Central Bank of Chile.
    14. Tommaso Nannicini & Andreas Billmeier, 2011. "Economies in Transition: How Important Is Trade Openness for Growth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(3), pages 287-314, June.
    15. Mr. Ananthakrishnan Prasad & Mr. Adarsh Kishore, 2007. "Indian Subnational Finances: Recent Performance," IMF Working Papers 2007/205, International Monetary Fund.
    16. Schüler, Martin, 2003. "How Do Banking Supervisors Deal with Europe-wide Systemic Risk?," ZEW Discussion Papers 03-03, ZEW - Leibniz Centre for European Economic Research.
    17. Mr. Mark J Flanagan, 2008. "Resolving a Large Contingent Fiscal Liability: Eastern European Experiences," IMF Working Papers 2008/159, International Monetary Fund.
    18. Robert M Stern, 2009. "Trade in Financial Services--Has the IMF Been Involved Constructively?," Working Papers 587, Research Seminar in International Economics, University of Michigan.
    19. Ioannidou, Vasso P., 2005. "Does monetary policy affect the central bank's role in bank supervision?," Journal of Financial Intermediation, Elsevier, vol. 14(1), pages 58-85, January.
    20. Lisandro Abrego & Pär Österholm, 2010. "External Linkages and Economic Growth in Colombia: Insights from a Bayesian VAR Model," The World Economy, Wiley Blackwell, vol. 33(12), pages 1788-1810, December.

    More about this item

    Keywords

    2008 banking crisis; regulatory failure; Ireland; principles based regulation; public debt;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucd:wpaper:201136. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Geary Tech (email available below). General contact details of provider: https://edirc.repec.org/data/geucdie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.