Systemic instability of the banking sector-causes and cures

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Reference no: EM133203044

Answer the following questions with the heading: "Systemic Instability of the Banking Sector: Causes and Cures"

  • Why banking crises force banks to deleverage, why deleveraging negatively affects the real economy and how the authorities can try to limit the damage to the real economy. (10/100)
  • The difference between micro- and macroprudential regulation. (15/100)
    • Discuss the various types of macro-prudential regulation as suggested by the Basel III framework.
    • Explain the limited extent to which increased liquidity and capital requirements can prevent banking instability.

Reference no: EM133203044

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