Post-crisis Re-regulation of Financial Markets
| Author: | Mgr. Petr Filipec |
|---|---|
| Year: | 2013 - summer |
| Leaders: | PhDr. Zdeněk Kudrna PhD. |
| Consultants: | |
| Work type: | Finance, Financial Markets and Banking Masters |
| Language: | English |
| Pages: | 67 |
| Awards and prizes: | |
| Link: | |
| Abstract: | This paper analyzes the causes of nancial crises, and on this basis it proposes possible changes in nancial regulation. Throughout the paper we work with a hypothesis that the major roots of nancial distress are excess credit growth and substantial capital in ows. We test this hypothesis on a dataset comprising entries from Australia, Japan, the UK, and US over the approximate period 1970-2010. The results con rm that there is a consistent relation of credit development to nancial crisis incidences and a somewhat less consistent e ect of capital in ows. Furthermore, since we nd a robust positive e ect of past credit growth on the probability of a crisis occurrence, we propose a change in interest rate policy. Our suggestion implies a consideration of credit to GDP ratio during the execution of the monetary policy decisions on interest rates. |
