Post-crisis Re-regulation of Financial Markets
|Author:||Mgr. Petr Filipec|
|Year:||2013 - summer|
|Leaders:|| PhDr. Zdeněk Kudrna PhD.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:|
|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 conrm that there is a consistent relation of credit development to
nancial crisis incidences and a somewhat less consistent eect of capital in
Furthermore, since we nd a robust positive eect 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.