Financial Stability Review
Financial Crisis Management Articles
2001
2005 2004 2003 2002 2001 2000 1999 1998
Debt
Workouts for Corporates, Banks and Countries: Some Common Themes
(82k)
(Issue 11, December 2001)
David Clementi,
Deputy Governor,
Financial Stability,
Bank of England.
Issue 11, December 2001.
In this speech, delivered at the Sixth Quadrennial Congress of INSOL 1 International in London on 19 July 2001, the Deputy Governor examines some similarities and differences between corporate, financial sector and sovereign debt workouts.
The
Resolution of International Financial Crises: Private Finance
and Public Funds
(89k)
(Issue 11, December 2001)
Andy Haldane,
International Finance Division,
Bank of England.
and Mark Kruger,
International Department,
Bank of Canada
When international financial crises strike, how should the official sector respond? Having a clear framework for crisis resolution is one key aspect. This article suggests some of the ingredients of such a framework. There should be clarity about the roles and responsibilities of debtors, creditors and the official sector. There should be presumptive limits on official sector lending. And there is a need to establish orderly mechanisms for restructuring sovereign debts. In short, there is much still to be done.
Costs
of Banking System Instability: Some Empirical Evidence
(206k)
(Issue 10, June 2001)
Glenn Hoggarth and Victoria Saporta,
Financial Industry and Regulation Division,
Bank of England.
There is now a substantial empirical literature on the causes of banking crises but there have been fewer studies measuring the potential costs of financial system instability. Yet it is a desire to avoid such costs that lies behind policies designed to prevent, or manage, crises. This article presents some cross-country estimates of the fiscal costs of crisis resolution and of output losses during crises. Although varying markedly from crisis to crisis, over the past 25 years cumulative output losses during banking crises have, on average, been large -around 15 per cent to 20 per cent of GDP. Moreover, whether banking crises cause or are the result of recession they exacerbate subsequent declines in output, as well as often being costly to resolve.
Key Resources
|
Memorandum of Understanding between HM Treasury,
the Bank of England and the Financial Services Authority
Download PDF (50k) |
