Discussion Paper
On systemically important financial institutions and progressive systemic mitigation
Abstract: One of the most important issues in the regulatory reform debate is that of systemically important financial institutions. This paper proposes a framework for identifying and supervising such institutions; the framework is designed to remove the advantages they derive from becoming systemically important and to give them more time-consistent incentives. It defines criteria for classifying firms as systemically important: size (the classic doctrine of too big to let fail) and the four Cs of systemic importance (contagion, concentration, correlation, and conditions); it also discusses the concept of progressive systemic mitigation.
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File(s): File format is application/pdf http://www.clevelandfed.org/research/policydis/pdp27.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of Cleveland
Part of Series: Policy Discussion Papers
Publication Date: 2009
Issue: Aug
Order Number: 27