Tesco
Financial Stability in the broader Mandate for Central Banks
Report

Financial Stability in the broader Mandate for Central Banks

A Political Economy Perspective

Viral Acharya
Brookings Institution, 2015
Get the Report

Read or listen offline

автоматическое преобразование текста в аудио
  • 0.5×
  • 0.75×
  • 1×
  • 1.25×
  • 1.5×
  • 1.75×
1×
автоматическое преобразование текста в аудио

Editorial Rating

7

Qualities

  • Well Structured
  • Overview

Recommendation

When greed looks for ways to evade sensible regulation and economic efficiency in search of profits, it can lead to big problems. Economist Viral Acharya acknowledges that regulating the financial sector can be a race among the rule makers, the politicians with vested interests, and the moneymen looking for loopholes. Yet Acharya’s proposals for enabling prudent central banking within a political context, though not new, make good economic sense. getAbstract recommends his timely report on how to design realistic regulation to policy makers and central bankers.

Take-Aways

  • Promoting financial stability through good times and bad is a central bank’s basic aim.
  • An “inherent time-inconsistency problem,” in which policies deemed desirable in the present can cause problems later, can undermine a central bank’s efforts.
  • Laws that operate by “function rather than form” can deter the regulatory arbitrage that occurs when financial institutions evade oversight by moving activities into shadow banking entities.

About the Author

Viral Acharya is an economics professor at New York University’s Stern School of Business.

Comment on this summary or Начать обсуждение