An Institutional Architecture for Meta-Risk Regulation in Irish Banking: Lessons from Anglo Irish Bank’s Minsky Moment

Abstract:     
The paper maps the risk management failures within Anglo Irish Bank, showing that, when banks are systemic in nature, poor internal corporate governance within a Minsky credit cycle can lead to destabilising macroeconomic conditions, which may prolong the effects of a credit-induced downturn. The paper highlights a failure of management at Anglo Irish Bank to establish and measure firm-level risks and develop appropriate internal controls to support a culture of prudent credit management. We propose the adoption of a novel supervisory architecture based on the meta-risk regulatory philosophy, which is designed to strengthen risk management practices at banks.

Number of Pages in PDF File: 18

Keywords: Corporate Governance, Regulation, Banking Crises, Meta-risk regulation, Ireland

JEL Classification: G18, E12, G38

Accepted Paper Series