Banking regulation and post crisis approach to bankruptcies: An analysis through shadow banking, moral hazard and too big to fail
Alessandro Zoino
Eurizon Asset Management, Luxembourg, alessandrozoino@gmail.com
Please cite the paper as:
Alessandro Zoino, (2018), Banking regulation and post crisis approach to bankruptcies: An analysis through shadow banking, moral hazard and too big to fail, World Economics Association (WEA) Conferences, No. 1 2018, Monetary Policy after the Global Crisis, 19th February to 20th April, 2018
Abstract
The work starts analyzing the pre and post 2007-2009 crisis banking regulation to later on deepen including mathematical finance and economic policy concepts and models into the application of the regulation among the US, Eurozone and Asia Pacific markets. The aim of the work is to analyze the application of the banking regulation in a bankruptcy or bailout scenario, through an empirical study of the authorities and consequently market agents. The model, based on the CAPM assumptions, is tested via the VaR implications and via the Black and Scholes application. The output of the analysis is to empirically demonstrate how the Moral Hazard concept and the speculative behaviours affect financial markets through the 2007-2009 crisis effects study, to then conclude with the inadequacy of the Too Big To Fail concept within the current financial system: if it is Too Big To Fail, then it is also Too Big To Exist.