Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71407
Authors: 
Milne, Alistair
Year of Publication: 
2013
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 7 [Issue:] 2013-7 [Pages:] 1-31
Abstract: 
A fundamental cause of the global financial crisis was excessive maturity mismatch, notably shadow banking holdings of sub-prime MBS and other structured credit instruments and cross-border Euro area interbank lending to the uncompetitive Euro area periphery. The costs of short term funding do not fully reflect underlying asset risks and this created systemic liquidity and credit risks. This externality can be controlled through the issue of tradable licenses for short term funding. This is a simpler and more efficient way of addressing systemic liquidity risk than the controls on individual institutions proposed by international regulators.
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: 
G28
E44
G21
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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