2023 Banking Turmoil

The subsidized emergency takeover of Credit Suisse by UBS brings the current global "too big to fail" regime into question. This column argues that an in-depth analysis of the global resolution framework by both regulators and academics is needed. The main question is whether a resolution of a global systemically important bank is indeed feasible in plausible scenarios. An affirmation would clearly be the best possible result of this analysis. However, if such a resolution proves not to be realistic, then there should be no hesitation to drastically reduce the global risks of such institutions via regulation of their business models.

Adopting a deferred pay scheme for bank managers would provide them with needed funding during a downturn and would incentivize more conservativism when it comes to risk-taking.

Following a widely cited report on unrecognized bank losses due to interest rate rises, Amit Seru and his co-authors have taken a...

Following up their recent analysis of risk in the banking system, DeMarzo, Jiang, Krishnamurthy, Matvos, Piskorski and Seru argue that banks should...

Laurence Kotlikoff and Rick Miller argue that banking as we know it is dying. It’s time to arrange a smooth transition to...

Accounting procedures for held-to-maturity assets in banks allows them to avoid taking losses. Research from professors Bischof, Laux, and Leuz shows how...

Bank regulators have always assumed that bank deposits are ‘sticky,’ but the advent of digital banking is changing that. New research focuses...

Far before the collapse of SVB, I provided systematic evidence that banks appear to benefit from their directorships on Federal Reserve Banks....

Viral Acharya and Raghuram Rajan explain how quantitative easing contributed to the problems underlying the recent bank failures such as that of...

Members of Congress are inundated with an avalanche of correspondence on a daily basis. But what persuades them to heed the call?...