What Silicon Valley Bank and Credit Suisse tell us about financial regulations

Jon Danielsson  and Charles Goodhart in this voxeu research article draw lessons from failure of SVB and Credit Suisse:

The downfall of Silicon Valley Bank and Credit Suisse has exposed failures in how we regulate the financial system. This column argues that the problems we now see in the system have arisen because the financial authorities have been trying to do the impossible: maintain growth while keeping inflation under control and financial stability high. The best way forward would be to focus on shock absorption and moral hazard, not the current approach of buffers and risk measurements.

Advertisement