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The G20 agenda for more resilient global financial system

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Frame of Image the efficiency of financial system 2. New financial instruments would ensure a safer financial system through diversification of risk  Contrary to these presumptions, the financial system was exposed to new risks  Growing integration of traditional lending and capital markets activities increases liquidity risk  FIS pursued a strategy to increase their sizes to take advantage of “TBTF” subsidy by borrowing funds from financial markets
KAIST GRADUATE SCHOOL OF FINANCE & ACCOUNTING
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Ⅰ. Introduction (2)
 Low transparency and limited disclosure of risk made difficult to assess risk exposures and their spillovers  Financial system became over-leveraged and heavily interconnected
 Neither the regulatory framework, nor supervisory oversight adapted to consider the new risks ⇒ The financial industry had been a disaster waiting to happen!!!  Moreover, these structural vulnerabilities were not confined to individual FIS, but spread the financial system as a whole
KAIST GRADUATE SCHOOL OF FINANCE & ACCOUNTING
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Ⅰ. Introduction (3)
 Realizing these serious drawbacks, the following essential elements of a new global financial stability framework have been suggested, the new system need: 1. To make sure a level playing field in regulation: to minimize the scope for both cross-sector and crossborder regulatory arbitrage 2. To focus on system-wide phenomena, including reduction of pro-cyclicality of financial system 3. To make resolution as a viable option to handle failed big FIS:


Full Text
Title The G20 agenda for more resilient global financial system
Similar Titles
Material Type Proceedings
Author(English)

Kim, Sungmin

Author(Korean)

김성민

Publisher

[Seoul]:KAIST

Date 2013-04
Pages 62
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Holding KDI School