List of Charts p. x
List of Tables p. xi
Contributors p. xii
Foreword Sir Edward George p. xiii
Acknowledgements p. xvi
1 Financial stability and central banks: an introduction Peter Sinclair p. 1
1.1 Background p. 1
1.2 Summary of the volume p. 2
1.3 Twelve questions about financial stability p. 7
1.4 Financial crises and the morbidity of banks p. 8
1.5 Competition and safety p. 9
1.6 The links between financial stability policy and monetary policy p. 13
1.7 Bakers and firefighters p. 15
1.8 Conclusions p. 17
2 Financial stability and the central bank: international evidence Juliette Healey p. 19
2.1 Introduction p. 19
2.2 The evolution of responsibilities p. 20
2.3 The current spectrum of central bank financial stability activities p. 24
2.4 Monetary policy independence and central bank responsibility for prudential regulation and supervision--conflict or synergy? p. 67
2.5 Key issues in establishing an effective regulatory institutional structure p. 74
2.6 Conclusions p. 75
3 The organisational structure of banking supervision Professor Charles Goodhart p. 79
3.1 Introduction p. 79
3.2 Arguments for separation p. 83
3.3 Arguments for unification p. 91
3.4 Are the issues the same in emerging countries? p. 96
3.5 Conclusions p. 101
4 Alternative approaches to regulation and corporate governance in financial firms David T. Llewellyn p. 107
4.1 Introduction and issues p. 107
4.2 The experience of banking crises p. 111
4.3 The regulatory regime p. 112
4.4 Components of a regulatory regime p. 114
4.5 Differentiations in the regime p. 136
4.6 Shifts within the regulatory regime p. 138
4.7 Assessment p. 142
5 Bank capital requirements and the control of bank failure Richard A. Brealey p. 144
5.1 Introduction p. 144
5.2 Causes and consequences of banking crises p. 146
5.3 Capital requirements p. 149
5.4 Bank risk and capital requirements p. 150
5.5 The cost of bank capital requirements p. 155
5.6 Asset valuation p. 158
5.7 Conclusions p. 160
6 Crisis management, lender of last resort and the changing nature of the banking industry Glenn Hoggarth and Farouk Soussa p. 166
6.1 Introduction p. 166
6.2 Justification for central bank involvement in financial crises p. 166
6.3 Crisis prevention - the financial safety net p. 167
6.4 Lender of penultimate resort - private sector solutions p. 168
6.5 Lender of last resort (LOLR) p. 170
6.6 Terms and conditions for LOLR p. 174
6.7 Crisis management, consolidation and the changing nature of the banking industry p. 177
6.8 Conclusion p. 180
Annex 1 Case study - UK small bank crisis 1991-2 p. 182
Annex 2 Case study - Barings, February 1995 p. 184
7 International capital movements and the international dimension to financial crises Peter Sinclair and Chang Shu p. 187
7.1 Introduction p. 187
7.2 Capital movements across the exchanges: curse or blessing? p. 187
7.3 Financial crises and capital movements p. 198
7.4 Capital controls in practice p. 208
7.5 Concluding remarks p. 219
8 Some concluding comments Alastair Clark p. 221
Appendix 1 Minutes of the Bank of England's 7th Central Bank Governors' Symposium (2 June 2000) p. 225
Appendix 2 Central Bank Governors' Symposium participants p. 232
References p. 237
Index p. 252