Financial paradigms
What market and regulatory issues led to the subprime crisis? How should prudential regulation be fixed? The answers depend on the interpretative lenses or 'paradigms' through which one sees finance. The agency paradigm, which has dominat...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2009/11/11800010/financial-paradigms http://hdl.handle.net/10986/10226 |
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okr-10986-102262021-04-23T14:02:49Z Financial paradigms Torre, Augusto de la Ize, Alain ADVERSE SELECTION AGENCY PROBLEM AGENCY PROBLEMS ARBITRAGE ASSET PRICES ASYMMETRIC INFORMATION BALANCE SHEET BANK POLICY BANK RUNS BANKING CRISIS BANKING SYSTEM BARGAINING BORROWER CAPITAL MARKET CENTRAL BANK COLLECTIVE ACTION COMMERCIAL BANKING COMMERCIAL BANKS CONFLICTS OF INTEREST CONSUMER PROTECTION CONTRACTUAL RELATIONSHIPS COORDINATION FAILURES CREDIT DEFAULT CREDIT DEFAULT SWAPS DEBT DEBT CONTRACTS DEEDS DEFAULT RISK DEPOSIT DEPOSIT INSURANCE DEPOSIT RATES DEPOSITOR DEPOSITORS ECONOMIC CONDITIONS EMERGING-MARKET ENTRY REQUIREMENTS EXPOSURE EXPOSURE TO RISK EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FEDERAL RESERVE SYSTEM FINANCIAL CRISES FINANCIAL INNOVATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REFORMS FINANCIAL REGULATION FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL TRANSACTIONS FINANCIAL VOLATILITY GLOBAL BANKING GOVERNANCE ISSUES HOLDING HOUSING HOUSING PRICES IMPERFECT INFORMATION INFORMED INVESTORS INSTRUMENT INSURANCE INVESTOR PROTECTION INVESTORS DEPOSITS IRRATIONAL EXUBERANCE LENDER LENDER OF LAST RESORT LIQUIDITY LOAN MARK-TO-MARKET MARKET DISCIPLINE MARKET FAILURE MARKET FAILURES MARKET INEFFICIENCIES MARKET LIQUIDITY MARKET PARTICIPANTS MARKET PLAYERS MARKET PRACTICES MATURITY MATURITY MISMATCH MATURITY MISMATCHES MONETARY FUND MORAL HAZARD MORTGAGE MORTGAGE CREDIT OPPORTUNISTIC BEHAVIOR POLICY RESPONSES PORTFOLIOS PRICE VOLATILITY PRINCIPAL-AGENT PROBLEMS PRIVATE SECTOR DEVELOPMENT PRUDENTIAL REGULATION PRUDENTIAL REGULATIONS PUBLIC POLICY REGULATOR REGULATORS REGULATORY FRAMEWORK REGULATORY REGIME RELATIONSHIP LENDING RETURNS RISK ASSESSMENTS RISK AVERSION RISK MANAGEMENT RISK TAKING SAFETY SAFETY NET SAVINGS SECURITIES SECURITIES MARKET SECURITIES MARKET REGULATIONS SECURITIZATION SHAREHOLDERS SHORT-TERM BORROWING SOCIAL COSTS STOCK PRICES SUPERVISORY AGENCY SUPPLIERS SYSTEMIC RISK SYSTEMIC RISKS TAX TRADITIONAL BANKING TRANSPARENCY WHOLESALE FUNDING WHOLESALE INVESTORS WORLD ECONOMY What market and regulatory issues led to the subprime crisis? How should prudential regulation be fixed? The answers depend on the interpretative lenses or 'paradigms' through which one sees finance. The agency paradigm, which has dominated recent regulatory policy, seems to be influencing much of the emerging reform agenda. But collective welfare failures particularly externalities and collective cognition failures particularly mood swings were at least as important in driving the crisis. All three paradigms should therefore be integrated into a more balanced policy agenda. But doing so will be difficult because they often have inconsistent policy implications. 2012-08-13T10:47:07Z 2012-08-13T10:47:07Z 2009-11 http://documents.worldbank.org/curated/en/2009/11/11800010/financial-paradigms http://hdl.handle.net/10986/10226 English Crisis Response Note; No. 10 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ADVERSE SELECTION AGENCY PROBLEM AGENCY PROBLEMS ARBITRAGE ASSET PRICES ASYMMETRIC INFORMATION BALANCE SHEET BANK POLICY BANK RUNS BANKING CRISIS BANKING SYSTEM BARGAINING BORROWER CAPITAL MARKET CENTRAL BANK COLLECTIVE ACTION COMMERCIAL BANKING COMMERCIAL BANKS CONFLICTS OF INTEREST CONSUMER PROTECTION CONTRACTUAL RELATIONSHIPS COORDINATION FAILURES CREDIT DEFAULT CREDIT DEFAULT SWAPS DEBT DEBT CONTRACTS DEEDS DEFAULT RISK DEPOSIT DEPOSIT INSURANCE DEPOSIT RATES DEPOSITOR DEPOSITORS ECONOMIC CONDITIONS EMERGING-MARKET ENTRY REQUIREMENTS EXPOSURE EXPOSURE TO RISK EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FEDERAL RESERVE SYSTEM FINANCIAL CRISES FINANCIAL INNOVATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REFORMS FINANCIAL REGULATION FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL TRANSACTIONS FINANCIAL VOLATILITY GLOBAL BANKING GOVERNANCE ISSUES HOLDING HOUSING HOUSING PRICES IMPERFECT INFORMATION INFORMED INVESTORS INSTRUMENT INSURANCE INVESTOR PROTECTION INVESTORS DEPOSITS IRRATIONAL EXUBERANCE LENDER LENDER OF LAST RESORT LIQUIDITY LOAN MARK-TO-MARKET MARKET DISCIPLINE MARKET FAILURE MARKET FAILURES MARKET INEFFICIENCIES MARKET LIQUIDITY MARKET PARTICIPANTS MARKET PLAYERS MARKET PRACTICES MATURITY MATURITY MISMATCH MATURITY MISMATCHES MONETARY FUND MORAL HAZARD MORTGAGE MORTGAGE CREDIT OPPORTUNISTIC BEHAVIOR POLICY RESPONSES PORTFOLIOS PRICE VOLATILITY PRINCIPAL-AGENT PROBLEMS PRIVATE SECTOR DEVELOPMENT PRUDENTIAL REGULATION PRUDENTIAL REGULATIONS PUBLIC POLICY REGULATOR REGULATORS REGULATORY FRAMEWORK REGULATORY REGIME RELATIONSHIP LENDING RETURNS RISK ASSESSMENTS RISK AVERSION RISK MANAGEMENT RISK TAKING SAFETY SAFETY NET SAVINGS SECURITIES SECURITIES MARKET SECURITIES MARKET REGULATIONS SECURITIZATION SHAREHOLDERS SHORT-TERM BORROWING SOCIAL COSTS STOCK PRICES SUPERVISORY AGENCY SUPPLIERS SYSTEMIC RISK SYSTEMIC RISKS TAX TRADITIONAL BANKING TRANSPARENCY WHOLESALE FUNDING WHOLESALE INVESTORS WORLD ECONOMY |
| spellingShingle |
ADVERSE SELECTION AGENCY PROBLEM AGENCY PROBLEMS ARBITRAGE ASSET PRICES ASYMMETRIC INFORMATION BALANCE SHEET BANK POLICY BANK RUNS BANKING CRISIS BANKING SYSTEM BARGAINING BORROWER CAPITAL MARKET CENTRAL BANK COLLECTIVE ACTION COMMERCIAL BANKING COMMERCIAL BANKS CONFLICTS OF INTEREST CONSUMER PROTECTION CONTRACTUAL RELATIONSHIPS COORDINATION FAILURES CREDIT DEFAULT CREDIT DEFAULT SWAPS DEBT DEBT CONTRACTS DEEDS DEFAULT RISK DEPOSIT DEPOSIT INSURANCE DEPOSIT RATES DEPOSITOR DEPOSITORS ECONOMIC CONDITIONS EMERGING-MARKET ENTRY REQUIREMENTS EXPOSURE EXPOSURE TO RISK EXTERNALITIES FEDERAL RESERVE FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FEDERAL RESERVE SYSTEM FINANCIAL CRISES FINANCIAL INNOVATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REFORMS FINANCIAL REGULATION FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL TRANSACTIONS FINANCIAL VOLATILITY GLOBAL BANKING GOVERNANCE ISSUES HOLDING HOUSING HOUSING PRICES IMPERFECT INFORMATION INFORMED INVESTORS INSTRUMENT INSURANCE INVESTOR PROTECTION INVESTORS DEPOSITS IRRATIONAL EXUBERANCE LENDER LENDER OF LAST RESORT LIQUIDITY LOAN MARK-TO-MARKET MARKET DISCIPLINE MARKET FAILURE MARKET FAILURES MARKET INEFFICIENCIES MARKET LIQUIDITY MARKET PARTICIPANTS MARKET PLAYERS MARKET PRACTICES MATURITY MATURITY MISMATCH MATURITY MISMATCHES MONETARY FUND MORAL HAZARD MORTGAGE MORTGAGE CREDIT OPPORTUNISTIC BEHAVIOR POLICY RESPONSES PORTFOLIOS PRICE VOLATILITY PRINCIPAL-AGENT PROBLEMS PRIVATE SECTOR DEVELOPMENT PRUDENTIAL REGULATION PRUDENTIAL REGULATIONS PUBLIC POLICY REGULATOR REGULATORS REGULATORY FRAMEWORK REGULATORY REGIME RELATIONSHIP LENDING RETURNS RISK ASSESSMENTS RISK AVERSION RISK MANAGEMENT RISK TAKING SAFETY SAFETY NET SAVINGS SECURITIES SECURITIES MARKET SECURITIES MARKET REGULATIONS SECURITIZATION SHAREHOLDERS SHORT-TERM BORROWING SOCIAL COSTS STOCK PRICES SUPERVISORY AGENCY SUPPLIERS SYSTEMIC RISK SYSTEMIC RISKS TAX TRADITIONAL BANKING TRANSPARENCY WHOLESALE FUNDING WHOLESALE INVESTORS WORLD ECONOMY Torre, Augusto de la Ize, Alain Financial paradigms |
| relation |
Crisis Response Note; No. 10 |
| description |
What market and regulatory issues led to
the subprime crisis? How should prudential regulation be
fixed? The answers depend on the interpretative lenses or
'paradigms' through which one sees finance. The
agency paradigm, which has dominated recent regulatory
policy, seems to be influencing much of the emerging reform
agenda. But collective welfare failures particularly
externalities and collective cognition failures particularly
mood swings were at least as important in driving the
crisis. All three paradigms should therefore be integrated
into a more balanced policy agenda. But doing so will be
difficult because they often have inconsistent policy implications. |
| format |
Publications & Research :: Brief |
| author |
Torre, Augusto de la Ize, Alain |
| author_facet |
Torre, Augusto de la Ize, Alain |
| author_sort |
Torre, Augusto de la |
| title |
Financial paradigms |
| title_short |
Financial paradigms |
| title_full |
Financial paradigms |
| title_fullStr |
Financial paradigms |
| title_full_unstemmed |
Financial paradigms |
| title_sort |
financial paradigms |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2009/11/11800010/financial-paradigms http://hdl.handle.net/10986/10226 |
| _version_ |
1764412315509194752 |