The Risks of Financial Institutions
Dice Center Working Paper No. 2005-13
34 Pages Posted: 16 Jun 2005
There are 2 versions of this paper
The Risks of Financial Institutions
The Risks of Financial Institutions
Date Written: June 2005
Abstract
Over the last twenty years, the consensus view of systemic risk in the financial system that emerged in response to the banking crises of the 1930s and before has lost much of its relevance. This view held that the main systemic problem is runs on solvent banks leading to bank panics. But financial crises of the last two decades have not fit the mold. A new consensus has yet to emerge, but financial institutions and regulators have considerably broadened their assessment of the risks facing financial institutions. The dramatic rise of modern risk management has changed how the risks of financial institutions are measured and how these institutions are managed. However, modern risk management is not without weaknesses that will have to be addressed.
JEL Classification: G2, G21, G22, G28, G10, D81
Suggested Citation: Suggested Citation
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