The Case for Influencing Operational Behaviour in a Macroprudential Approach to Financial Stability

Posted: 19 Mar 2010 Last revised: 20 Jan 2016

See all articles by Thomas Ilin

Thomas Ilin

Cranfield University - School of Management

Date Written: March 15, 2010

Abstract

This paper introduces an alternative perspective to the central themes of current literature on macroeconomic resilience and systemic risk in the global financial system. It presents an interdisciplinary discourse centered on evolutionary economics leading to theoretical propositions for a macroprudential approach that is more sensitive to the evolving operational behaviour of system participants, their collective behavioural contributions to the generation of systemic risk, and the recursive effects of regulatory responses on that behaviour. Then the potentials of this approach are explored for emphasizing pre-emptive operational intervention over retrospective regulatory enforcement.

Keywords: systemic risk, financial stability, macroprudential, banking, operations, evolutionary economics, economic theory, regulations, regulatory, global financial system, resilience, behaviour, behavior

JEL Classification: E10, E60, B41, A12

Suggested Citation

Ilin, Thomas, The Case for Influencing Operational Behaviour in a Macroprudential Approach to Financial Stability (March 15, 2010). Available at SSRN: https://ssrn.com/abstract=1572018 or http://dx.doi.org/10.2139/ssrn.1572018

Thomas Ilin (Contact Author)

Cranfield University - School of Management ( email )

Bedfordshire, MK43 0AL
United Kingdom

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