Banking Fragility and Financial Crises

Canadian Business Law Journal, Volume 57, December 2015: pp. 254-269.

16 Pages Posted: 25 Jun 2016

See all articles by Dan Ciuriak

Dan Ciuriak

Ciuriak Consulting Inc.; C.D. Howe Institute; Centre for International Governance Innovation (CIGI); BKP Development Research & Consulting GmbH; Asia Pacific Foundation of Canada

Date Written: December 2015

Abstract

The history of banking crises grows richer with each passing decade, indeed with each passing year. Theories abound: the inherent instability of fractional reserve systems, systemic shocks that overwhelm risk management defenses, myopic optimism, a failure to regulate enough, too much regulation (creating moral hazard), a failure of regulators, a failure of bankers (due to greed, which stands in apposition to the "greed is good" school of thought), and so forth. This Review Essay considers alternative theories with a fresh motivation from Charles Calomiris and Stephen Haber’s book, "Fragile by Design: The Political Origins of Banking Crises & Scarce Credit."

Keywords: banks, fragility, financial crises, game of bank bargains, regulation

JEL Classification: G21, G28

Suggested Citation

Ciuriak, Dan, Banking Fragility and Financial Crises (December 2015). Canadian Business Law Journal, Volume 57, December 2015: pp. 254-269.. Available at SSRN: https://ssrn.com/abstract=2800253

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
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Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

BKP Development Research & Consulting GmbH ( email )

Romanstrasse 74
München, 80639
Germany

Asia Pacific Foundation of Canada ( email )

Canada

HOME PAGE: http://ciuriakconsulting.com/

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