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Title:Register, issue, cap and trade: A proposal for ending current and future financial crises PDF Logo
Authors:Milne, Alistair
Issue Date:2012
Series/Report no.:Economics Discussion Papers 2012-34
Abstract:A fundamental cause of the global financial crisis was excessive creation of short-term money-like liabilities (quasi-money), notably in shadow banking holdings of sub-prime MBS and other US dollar structured credit instruments and in cross-border flow of capital to the uncompetitive Euro area periphery. This paper proposes a registration system for: (i) controlling quasi-money and resulting economic externalities and systemic risks; and (ii) supporting public sector monetary issue to counter collapse of private sector credit in the aftermath of crises. This policy would trigger a profound but also economically beneficial change in the business models of both banks and long-term investors.
Subjects:Basel III
debt deflation
endogenous money
financial regulation
global financial crisis
limited purpose banking
maturity mismatch
narrow money
Pigouvian taxes
ring fencing
systemic financial risk
systemic financial externalities
Tobin tax
JEL:E44
G21
G28
Creative Commons License:http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type:Working Paper
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Discussion Papers

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