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

Journal of Banking Regulation, Forthcoming

18 Pages Posted: 19 Jul 2011

See all articles by K.P.V. O'Sullivan

K.P.V. O'Sullivan

University of Limerick- Kemmy Business School

Stephen Kinsella

University of Limerick

Date Written: July 18, 2011

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.

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

JEL Classification: G18, E12, G38

Suggested Citation

O'Sullivan, K.P.V. and Kinsella, Stephen, An Institutional Architecture for Meta-Risk Regulation in Irish Banking: Lessons from Anglo Irish Bank’s Minsky Moment (July 18, 2011). Journal of Banking Regulation, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1888340

K.P.V. O'Sullivan (Contact Author)

University of Limerick- Kemmy Business School ( email )

Limerick
Ireland

HOME PAGE: http://www.vincentosullivan.com

Stephen Kinsella

University of Limerick ( email )

Limerick
Ireland
+35361233611 (Phone)
+35361330316 (Fax)

HOME PAGE: http://stephenkinsella.net

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