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英国论文网:British and Dutch GDP:The spread of the cri(44)


rejection of the Paulson Plan will render the market environment even more forbidding
for European banks. Policy makers in Europe cannot continue to muddle
through. They need to rise to the occasion. The implementation of these simple
proposals would put them ahead of events in the unfolding crisis.
Being behind the curve is extremely costly – a fact that US taxpayers have discovered
in a spectacular and exceedingly expensive manner over the past two
weeks.
Editors’ note: This is an updated version of a column that appeared today in the
Financial Times newspaper, 30 September 2008.
Crisis management tools for the euro-area 63

20 October 2008
The current crisis has exposed the poor organisation of financial supervisory
responsibilities, as central banks, EU ministers, and treasury authorities fought to
respond appropriately. This column argues for the reorganisation of the European
financial regulatory apparatus using a ‘four peaks’ approach that horizontally
divides responsibilities according to objectives.
World leaders, after a false start, have made decisions that at least give us a chance
of getting past this crisis. Now is the time to start thinking about how to reduce
the risk of finding ourselves in the same situation in the future.
Many troubled intermediaries violated no rule or regulation. It is certainly right
to replace greedy managers. The same decision should be taken for those responsible
for designing the wrong rules for bank capital, rating agencies, and accounting
standards. The same approach should be taken for supervision: those who did not
abide by the rules must be severely punished, along with those who were not able
to supervise.
Who is in charge?
The crisis calls into question the efficacy of both the ‘horizontal’ allocation of
competencies among different authorities (fragmentation in the US or the single
regulator in many EU countries) and the ‘vertical’ distribution of competencies,
where only national entities appear to be in charge of supervision (in the US there
is a mix of federal and state competencies on banks while only states supervise
insurance; in Europe, lacking a political and fiscal union, the agencies are basically
all at the member state level). The central banks’ role swings from monetary
policy to lender of last resort to policy-maker, as we have observed over the last
year and more so in the past few weeks.
In the beginning, UK central bankers panicked in the face of a textbook bank
run. Then, all authorities hysterically moved to restrict short selling. Late night
meeting of EU ministers to bail out transnational banks, frantic decisions across
Europe to raise deposit insurance coverage beyond credible levels, and guarantees
for all interbank loans followed. Looking at the ways such policies have been used



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