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
Date Written: July 18, 2011
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: Suggested Citation