bank run

As the Brexit worries began two weeks ago, I flagged Italian banks - more than the UK economy - as one of my principle concerns, because of the potential to cause systemic damage to the euro system. And now the contagion is spreading, with…

The existence of capital controls eliminates contagion and makes it possible to bail-in deposits that would normally be considered to have systemic consequences. The more I look at it, the less benign this bailout deal appears. Indeed it…

Last night the European Central Bank announced that it would no longer accept Greek government or Greek government-guaranteed collateral for loans. This step had been telegraphed for a month but the timing demonstrates how political an…

No one has denied that China was overdue for a credit shakeout due to the Chinese government’s desire to stem excess credit growth as the economy rebalances. The question has always been about how much of a shakeout Chinese policy makers…

Below is the full text of a speech by Federal Reserve Governor Daniel Tarullo on regulation of non-bank financial institutions.

By Frances Coppola In my post on the anatomy of a bank run, I suggested that the rule should be "provide central bank liquidity support to everything, taxpayer support to nothing". This is because in a bank run/liquidity crisis, it isn't…

In my last post, I argued that enforced separation of investment banking and commercial banking would not eliminate the need to provide central bank support to investment banks and other non-banks in the event of another Lehman-type…

The European Union is an existential crisis because its crowning achievement, the single currency, has come under assault from all sides. The continued existence of the Euro has even been called into question as country after country within…

Regarding Cyprus, recently I heard someone claim that depositors are not creditors of a bank despite the fact that deposits are bank liabilities. This is bollocks. Depositors are indeed creditors, particularly in Europe where they are…

As I indicated three months ago, the IMF now supports capital controls in specific and extraordinary circumstances, particularly in view of its experience in Iceland. This is now relevant given the situation in Cyprus. Matina Stevins of Dow…