Jump to ContentJump to Main Navigation
Time for a Visible HandLessons from the 2008 World Financial Crisis$
Users without a subscription are not able to see the full content.

Stephany Griffith-Jones, José Antonio Ocampo, and Joseph E. Stiglitz

Print publication date: 2010

Print ISBN-13: 9780199578801

Published to Oxford Scholarship Online: February 2010

DOI: 10.1093/acprof:oso/9780199578801.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 19 June 2021

The Role of Policy and Banking Supervision in the Light of the Credit Crisis

The Role of Policy and Banking Supervision in the Light of the Credit Crisis

(p.150) 8 The Role of Policy and Banking Supervision in the Light of the Credit Crisis
Time for a Visible Hand

Avinash D. Persaud

Oxford University Press

Persaud provides in his chapter complementary analysis on the design of banking regulation and supervision in the light of the credit crisis. In the author's view, two fundamental flaws in financial regulation led to the biggest crisis of modern times. The first was to put market evaluations of risk at the heart of financial regulation, through external ratings and risk measures derived from market prices. The essential problem is that market prices may improperly evaluate risk in the presence of market failures. The second flaw was to assume that common standards, such as value‐accounting and risk measures are good and that diversity is bad, thus underestimating the advantages different players have to assume different risks.

Keywords:   systemic risk, banking supervision, risk absorption, market evaluations of risk

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .