Show simple item record

dc.contributor.authorSihag, Balbir S.
dc.date.accessioned2018-07-09T08:38:21Z
dc.date.available2018-07-09T08:38:21Z
dc.date.issued2017-04
dc.identifier.citationTheoretical Economics Letters, 2017, 7, 352-364en_US
dc.identifier.issn2162-2086
dc.identifier.urihttps://doi.org/10.4236/tel.2017.73027
dc.identifier.urihttp://hdl.handle.net/123456789/1744
dc.description.abstractIn the wake of the recent Great recession of 2008-9, prudential supervision and “too-big-to-fail” have become the focal topics of discussion and policy. Western countries have added prudential supervision to complement the traditional regulatory approach to prevent reoccurrence of financial crisis. Additionally, large financial institutions are subjected to repeated “stress tests” to diagnose the vulnerability of the financial system. Kautilya had argued a long time ago that moral failure was the primary source of the systemic risk. Keeping that in view, relevance of his three insights is presented. Firstly, regulations, prudential supervision and ethical grounding are needed for preventing future financial crisis. That is, current approach of relying only on regulations and supervision, most probably would not prevent future financial crisis. Secondly, if moral hazard resulting from moral failure is the primary source of systemic risk, undue focus on “too-big-to-fail” financial institutions is unwarranted. Thirdly, Financial Stability Oversight Council’s two objectives, promoting market discipline and prevention of another financial crisis, do not seem to be compatible with each other.en_US
dc.language.isoenen_US
dc.publisherScientific Researchen_US
dc.subjectEthical Groundingen_US
dc.subjectForesighten_US
dc.subjectOversighten_US
dc.subjectMoral Hazarden_US
dc.subjectMoral Failureen_US
dc.subject“Too-Big-to-Fail”en_US
dc.subjectSystemic Risken_US
dc.titleKautilya on Foresight, Oversight, Regulations, Ethics and Systemic Risken_US
dc.typeArticleen_US


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record