Work detail

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.

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