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Questo articolo è stato pubblicato il 11 ottobre 2010 alle ore 14:21.
LONDON – It seemed that a new model for global governance had been forged in the white heat of the financial crisis. But now that the ashes are cooling, different perspectives on bank regulation are emerging on either side of the Atlantic.
The emphasis in Europe has been on regulating financial markets with a view to moderating future crises. Credit mistakes are made during the boom, not during the crash, so the argument goes. Better regulation and monetary policy during the boom years, therefore, could limit the scale of any bust.
By contrast, the emphasis in the United States has been on finding market-friendly ways to contain spillovers from bank failure. Policy debates in the US are chiefly preoccupied with ensuring that banks are never too big to fail; that private investors rather than taxpayers hold contingent capital, which in a crash can be converted into equity; and that over-the-counter markets’ functioning be improved through greater reliance on centralized trading, clearing, and settlements.
The chief point of intersection between the European and US approaches is major banks. This convergence has less to do with regulatory thinking on bank size or function than with a common need to play to the political gallery and raise more tax revenue.
Banks’ balance sheets are systemically dangerous when bloated by leverage, and it is this that regulatory or fiscal policy should address through liquidity buffers and leverage ratios. After all, it is the contagiousness of financial crises, not banks’ size, that matters. Any list conjured up in 2006 of institutions that were too big to fail would not have included Northern Rock, Bradford & Bingley, IKB, Bear Sterns, or even Lehman Brothers.
Banks lend to banks, so while some are more illiquid than others, they are all intrinsically illiquid institutions. Small failures can give birth to large panics, which means that in a crisis almost everyone is too big to fail. The reality is that we can have as large a financial boom and subsequent bust as we just experienced, resulting in the same economic misery, in a world made up only of small banks.
Many argue that bankers’ belief that their institutions are too big to fail and that their jobs are safe encourages them to underestimate the risks that they assume. But if that belief dominated bankers’ thinking, they would still worry about their savings. In other words, they would not wrap themselves up in their institutions’ equity and the leveraged products they were selling.
