## 1. Support for Financial and Other Sectors and Upfront Financing Need

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### Familiar Factors
- Asset price bubbles
  - U.S. house prices rose “in excess of 30 percent in the five years preceding the crisis” and peaked six quarters prior to the beginning of the crisis.
- Credit booms and excessive debt burdens
  - Household indebtedness rose sharply after 2000; debt service relative to disposable income reached a historical high.
- Build-up of marginal loans and systemic risk
  - U.S. subprime mortgages and foreign-currency–denominated household credit in some eastern European economies increased correlated default risk.
- Failure of regulation and supervision
  - Regulatory and supervisory frameworks did not keep pace with financial innovation and systemic developments, including the growth of the “shadow banking system.”
- Figures referenced: Figure 1 (Asset Price Bubbles), Figure 2 (Credit Booms), Figure 3 (Subprime Mortgage Credit Boom), Figure 4 (Credit Booms and Crises), Figure 5 (Credit Booms and Lending Standards), Figure 6 (Global Housing Boom in 2000s), Figure 7 (Credit Booms and Capital Flows).

### New Dimensions
- Widespread use of complex and opaque financial instruments
  - “More than 70 percent of non-conforming mortgages in the U.S. were securitized by 2007, up from less than 35 percent in 2000.”
- Increased financial integration and interconnectedness
  - U.S. financial assets represented “about 31 percent of global financial assets”; U.S. dollar share in reserve currency assets is “about 62 percent.”
  - Figures referenced: Figure 8 (Securitization), Figure 9 (Increasing Financial Integration), Figure 10 (Cross-Border Banking).
- High leverage in financial institutions and households
  - Rapid leverage build-up in U.S. investment banks and European banks; household leverage rose markedly in many advanced economies.
  - Figures referenced: Figure 11 (Financial System Leverage), Figure 12 (Household Leverage).
- Central role of the household sector
  - Overextension of households (notably via non-traditional mortgages in the U.S.) transformed household distress into a primary origin and transmission channel.

### Spread and Transmission
- Crisis spread and phases
  - Catalyst: overextended U.S. housing and mortgage markets.
  - Trigger: turnaround in U.S. house prices; subprime sector as initiator.
  - Amplification phases:
    1. Direct exposures: European banks with direct subprime holdings (e.g., IKB, BNP Paribas) experienced liquidity runs.
    2. Asset-market transmission: liquidity shortages, credit market freezes, equity sell-offs, FX moves; central banks extended liquidity and currency swap lines.
    3. Solvency phase: collapse of Lehman Brothers (October 2008) triggered solvency concerns, massive sell-offs, and near-systemic breakdowns.
- Figures referenced: Figure 13 (Spread of the Global Financial Crisis).

### Government Interventions and Distortions
- Principal forms of intervention
  - (i) liquidity provision through collateralized lending and other schemes;
  - (ii) support for short-term wholesale funding markets;
  - (iii) guarantees of retail deposits and other liabilities;
  - (iv) purchases or exchanges of non-performing or illiquid assets;
  - (v) capital injections to banks.
- Effects and distortions
  - Large-scale interventions stabilized systems but introduced distortions (skewed resource allocation; competitive distortions across borders).
  - Examples: targeted U.S. Federal Reserve interventions; expanded deposit insurance guarantees; Ireland’s bank guarantees reduced bank CDS spreads while increasing sovereign spreads.
  - National ring-fencing and asset grabs occurred where cross-border burden sharing and resolution mechanisms were absent.

### Lessons for Macroeconomic Policy
- Monetary policy
  - Policy rate is a poor instrument to address excess leverage or asset-price deviations because of trade-offs with the output gap.
  - Prefer targeted macroprudential tools: higher capital ratios, regulatory liquidity ratios, lower loan-to-value ratios, increased margin requirements.
  - Consider central banks as macroprudential regulators given monitoring capacity and role as lender of last resort; requires transparency and accountability.
- Liquidity provision
  - Central banks extended lender-of-last-resort functions to non-deposit-taking institutions and a broad range of asset markets; extension is warranted given their unique capacity.
- Fiscal policy and automatic stabilizers
  - “Fiscal space” is desirable to allow larger fiscal deficits when needed; target debt levels or fiscal buffers should be higher than pre-crisis.
  - Improve automatic stabilizers and design contingent fiscal rules (tax or transfer triggers based on macro variables such as employment/unemployment) to avoid late discretionary measures.

### Redesigning Prudential Regulation and Supervision
- Five general areas for action
  1. Regulatory perimeter: broaden to capture all activities posing systemic risk.
  2. Micro-prudential regulation: enhance capital, liquidity, and risk management to account for systemic potential.
  3. Macro-prudential regulation: dampen procyclicality and leverage build-up.
  4. Information and market discipline: improve disclosure, corporate governance, and transparency.
  5. Organization of regulation and supervision: improve coordination within and across countries.
- Four guiding principles
  - Broaden perimeter to address systemic risk; consider regulating activities (not only institutions).
  - Ensure incentive-compatible regulation across institutions and over time; strengthen supervisory resources and early intervention capability.
  - Complement supervision with credible market discipline and effective resolution frameworks to limit moral hazard.
  - Recognize limits of regulation: avoid excessive burdens, remain vigilant to regulatory lag and industry capture.

- Micro-prudential specifics
  - Capital and leverage
    - Capital rules must reflect that liquidity risk can convert to solvency risk; tighten Tier 1 components; consider simple gross leverage measures to supplement risk-based capital.
  - Liquidity oversight
    - Impose higher liquidity requirements for business models dependent on wholesale funding.
  - Risk management and CCPs
    - Improve risk management to capture tail and systemic correlations; promote central counterparty clearing for OTC derivatives and strengthen cross-border oversight of CCPs.
  - Resolution frameworks and compensation
    - Improve resolution frameworks for banks and non-banks including legal powers for early intervention and restructuring.
    - Encourage long-term, risk-aligned compensation structures and supervisory oversight of compensation practices.

- Macro-prudential specifics
  - Countercyclical tools
    - Design countercyclical capital and provisioning rules (e.g., loan-to-value limits, stricter foreign-currency credit requirements).
    - Use multiple indicators and, where possible, non-discretionary trigger mechanisms that act symmetrically.
  - Cross-border coordination
    - Coordinate cross-border to avoid circumvention and adverse spillovers; host-home supervisory cooperation is critical.
  - Accounting and valuation
    - Address procyclicality of fair value accounting by requiring higher buffers and improving valuation guidance while retaining mark-to-market principles.

- Information, market discipline, and ratings
  - Strengthen disclosure: off-balance sheet commitments, liquidity profiles, exposures and concentrations.
  - Improve transparency and governance of credit rating agencies; review role of ratings in regulatory frameworks.

- Organization and mandates
  - Consider explicit systemic-risk mandates for central banks and regulators involved in financial stability.
  - Ensure agencies have clear mandates, tools, independence, accountability, and legal frameworks facilitating information sharing and cross-border cooperation (e.g., MoUs).
  - Enhance consistency and coherence across jurisdictions to limit regulatory arbitrage, including in offshore centers.

### Reform of the International Financial Architecture
- Surveillance and early warning
  - Strengthen multilateral surveillance, macro-financial analysis, high-frequency indicators, and early warning systems to “connect the dots.”
  - Improve data collection and disclosure (non-bank financial institutions, housing statistics, credit risk transfers, large non-financial corporations’ financial operations).
  - Multilateral assessments should balance voluntary engagement with stronger participation requirements and improved dissemination.
- Cross-border crisis management and resolution
  - Enhance “colleges of supervisors” with mandates and accountability for internationally active institutions.
  - Need clear, binding cross-border burden-sharing rules for failing global institutions.
  - Pursue second-best options (new charters for internationally active banks, harmonization, enhanced coordination) given the unlikelihood of a single global regulator soon.
- International liquidity provision
  - Better facilities for cross-border liquidity for banks and countries are needed (contingent credit lines, regional swaps/pooling, expanded IMF mechanisms).
  - Improvements require resolving political, institutional, and operational barriers.

### Conclusion and Research Gaps
- Core weaknesses exposed
  - Treatment of systemically important institutions; systemic risk assessment; resolution frameworks.
- Policy goals and toolkit
  - Maintain stable output gap and low inflation while monitoring asset price composition and leverage; use broader toolkit (monetary plus macroprudential and fiscal automatic stabilizers).
- Implementation challenges
  - Political economy and industry lobbying will shape outcomes and may create implementation obstacles.
- Suggested areas for further research
  - Competition policy for a stable financial system.
  - Consumer protection in financial services.
  - Political economy of financial regulation, financial openness, and crises.

### Key Statistics and Support Measures (selected numerical facts preserved as in source)
- U.S. house price increase: “in excess of 30 percent in the five years preceding the crisis.”
- Securitization of non-conforming mortgages: “more than 70 percent … by 2007, up from less than 35 percent in 2000.”
- U.S. share of global financial assets: “about 31 percent”; U.S. dollar share in reserve currency assets: “about 62 percent.”
- Table 1 (Support for Financial and Other Sectors and Upfront Financing Need, As of June 2009; in percent of 2008 GDP) — selected averages and totals reproduced exactly as in source:
  - Average (PPP GDP Weights)
    - G-20: 2.2 3.5 8.8 9.3 3.6
    - Advanced Economies: 3.4 5.3 14.0 6.9 5.5
    - Emerging Economies: 0.2 0.3 0.1 13.6 0.4
  - In billions of US$: 1,149 1,937 4,646 2,514 1,849
  - In billions of US$: 223 871 1,605 47
- Country-specific examples from the table (preserved as presented)
  - United States upfront financing need (estimated for 2009-10): US$960 bn (6.7 percent of GDP) consisting of TARP and other measures.
  - United Kingdom estimated upfront financing need: ₤289 bn (20 percent of GDP).
  - Japan budget support: JPY 3,900 bn (0.8 percent of GDP).
  - Norway: balance sheet expansion (excluding SWF) noted as “4.5 percent of GDP” in a footnote.
- Note: Table footnotes and country cells reflect announced or pledged amounts; Column D indicates actual changes in central bank balance sheets from June 2007 to April 2009.

*Source: _wp1044*

### 1. Support for Financial and Other Sectors and Upfront Financing Need.......................30

### 1. Support for Financial and Other Sectors and Upfront Financing Need

### Familiar Factors
- Figure 1: Familiar Factors: Asset Price Bubbles
- Figure 2: Familiar Factors: Credit Booms
- Figure 3: Subprime Mortgage Credit Boom
- Figure 4: Credit Booms and Crises
- Figure 5: Credit Booms and Lending Standards
- Figure 6: Global Housing Boom in 2000s
- Figure 7: Credit Booms and Capital Flows

### New Dimensions
- Figure 8: New Dimensions: Securitization
- Figure 9: New Dimensions: Increasing Financial Integration
- Figure 10: New Dimensions: Cross-Border Banking
- Figure 11: New Dimensions: Financial System Leverage
- Figure 12: New Dimensions: Household Leverage

### Spread and Transmission
- Figure 13: Spread of the Global Financial Crisis

*Source: _wp1044 - 1. Support for Financial and Other Sectors and Upfront Financing Need.......................30*

### References...............................................................................................38

### _wp1044 - References...............................................................................................38

### I. Introduction
- Paper objective: draw lessons from the recent global financial crisis for reforming financial systems, covering macroeconomic policy, financial regulation, and the global financial architecture.
- Approach:
  - Review causes of the crisis with historical and international perspectives.
  - Analyze channels and mechanisms of propagation and spillovers.
  - Assess government interventions and macroeconomic legacies.
  - Identify principles and policy actions for redesigning prudential regulation and international architecture.
- Structure: Section 2 causes; Section 3 crisis evolution and interventions; Section 4 lessons for macro policy and financial reform; Section 5 conclusions and research gaps.

### II. Causes of the Crisis
- Multiple contributing factors: elements common to past crises and several new dimensions.
- Four commonalities with previous crises:
  - Asset price increases that were unsustainable.
    - U.S. house prices rose in excess of 30 percent in the five years preceding the crisis and peaked six quarters prior to the beginning of the crisis.
  - Credit booms that produced excessive debt burdens.
    - Household indebtedness rose sharply after 2000; debt service relative to disposable income reached a historical high.
  - Build-up of marginal loans and systemic risk.
    - U.S. subprime mortgages and foreign-currency–denominated household credit in some eastern European economies increased correlated default risk.
  - Failure of regulation and supervision to keep up with financial innovation and systemic developments (including the growth of the “shadow banking system”).
- New dimensions that amplified and transmitted the crisis:
  - Widespread use of complex and opaque financial instruments.
    - More than 70 percent of non-conforming mortgages in the U.S. were securitized by 2007, up from less than 35 percent in 2000.
  - Increased interconnectedness among financial markets and institutions, with the U.S. at the core.
    - U.S. financial assets represented about 31 percent of global financial assets; the U.S. dollar share in reserve currency assets is about 62 percent.
  - High degree of leverage of financial institutions and households.
    - Rapid leverage build-up in U.S. investment banks and European banks; household leverage rose markedly in many advanced economies.
  - Central role of the household sector.
    - Overextension of households (notably via non-traditional mortgages in the U.S.) turned household distress into a primary origin and transmission channel.

### III. Evolution of the Crisis and Transmission Channels
- Catalysts, triggers, and amplification:
  - Catalyst: overextended U.S. housing and mortgage markets.
  - Trigger: turnaround in U.S. house prices; subprime sector as initiator.
  - Amplification via multiple phases:
    1. Direct exposures: European banks with direct subprime holdings (e.g., IKB, BNP Paribas) experienced liquidity runs.
    2. Asset-market transmission: liquidity shortages, credit market freezes, equity sell-offs, FX moves; central banks extended liquidity and currency swap lines.
    3. Solvency phase: collapse of Lehman Brothers (October 2008) triggered solvency concerns, massive sell-offs, and near-systemic breakdowns.
- Government interventions (principal forms):
  - (i) liquidity provision through collateralized lending and other schemes;
  - (ii) support for short-term wholesale funding markets;
  - (iii) guarantees of retail deposits and other liabilities;
  - (iv) purchases or exchanges of non-performing or illiquid assets;
  - (v) capital injections to banks.
- Effects and distortions of interventions:
  - Large-scale interventions stabilized systems but were distortive (e.g., skew resource allocation, create competitive distortions across borders).
  - Examples: U.S. Federal Reserve interventions in specific markets; guarantees prompting increases in deposit insurance coverage; Ireland’s bank guarantees reducing bank CDS spreads while increasing sovereign spreads.
  - National ring-fencing and asset grabs occurred where cross-border burden sharing and resolution mechanisms were absent.

### IV. Lessons for Macroeconomic Policy
- Monetary policy:
  - Policy rate is a poor instrument to address excess leverage or asset-price deviations because of trade-offs with the output gap.
  - Prefer targeted macroprudential tools: higher capital ratios, regulatory liquidity ratios, lower loan-to-value ratios, increased margin requirements.
  - Consider central banks as macroprudential regulators given monitoring capacity and role as lender of last resort; requires transparency and accountability.
- Liquidity provision:
  - Central banks extended lender-of-last-resort functions to non-deposit-taking institutions and a broad range of asset markets; extension is warranted given their unique capacity.
- Fiscal policy and automatic stabilizers:
  - “Fiscal space” is desirable to allow larger fiscal deficits when needed; target debt levels or fiscal buffers should be higher than pre-crisis.
  - Improve automatic stabilizers and design contingent fiscal rules (tax or transfer triggers based on macro variables such as employment/unemployment) to avoid late discretionary measures.

### V. Redesigning Prudential Regulation and Supervision
- Five general areas for action:
  1. Regulatory perimeter: broaden to capture all activities posing systemic risk.
  2. Micro-prudential regulation: enhance capital, liquidity, and risk management to account for systemic potential.
  3. Macro-prudential regulation: dampen procyclicality and leverage build-up.
  4. Information and market discipline: improve disclosure, corporate governance, and transparency.
  5. Organization of regulation and supervision: improve coordination within and across countries.
- Four guiding principles:
  - Broaden perimeter to address systemic risk; consider regulating activities (not only institutions).
  - Ensure incentive-compatible regulation across institutions and over time; strengthen supervisory resources and early intervention capability.
  - Complement supervision with credible market discipline and effective resolution frameworks to limit moral hazard.
  - Recognize limits of regulation: avoid excessive burdens, remain vigilant to regulatory lag and industry capture.
- Micro-prudential specifics:
  - Capital rules must reflect that liquidity risk can convert to solvency risk; tighten Tier 1 components; consider simple gross leverage measures to supplement risk-based capital.
  - Strengthen liquidity oversight and impose higher liquidity requirements for business models dependent on wholesale funding.
  - Improve risk management to capture tail and systemic correlations; enhance counterparty credit risk management.
  - Promote central counterparty clearing for OTC derivatives and strengthen cross-border oversight of CCPs.
  - Improve resolution frameworks for banks and non-banks including legal powers for early intervention and restructuring.
  - Encourage long-term, risk-aligned compensation structures and supervisory oversight of compensation practices.
- Macro-prudential specifics:
  - Design countercyclical capital and provisioning rules (e.g., loan-to-value limits, stricter foreign-currency credit requirements).
  - Use multiple indicators and, where possible, non-discretionary trigger mechanisms that act symmetrically.
  - Coordinate cross-border to avoid circumvention and adverse spillovers; host-home supervisory cooperation is critical.
  - Address procyclicality of fair value accounting by requiring higher buffers and improving valuation guidance while retaining mark-to-market principles.
- Information, market discipline, and ratings:
  - Strengthen disclosure: off-balance sheet commitments, liquidity profiles, exposures and concentrations.
  - Improve transparency and governance of credit rating agencies; review role of ratings in regulatory frameworks.
- Organization and mandates:
  - Consider explicit systemic-risk mandates for central banks and regulators involved in financial stability.
  - Ensure agencies have clear mandates, tools, independence, accountability, and legal frameworks facilitating information sharing and cross-border cooperation (e.g., MoUs).
  - Enhance consistency and coherence across jurisdictions to limit regulatory arbitrage, including in offshore centers.

### VI. Reform of the International Financial Architecture
- Surveillance and early warning:
  - Strengthen multilateral surveillance, macro-financial analysis, high-frequency indicators, and early warning systems to “connect the dots.”
  - Improve data collection and disclosure (non-bank financial institutions, housing statistics, credit risk transfers, large non-financial corporations’ financial operations).
  - Multilateral assessments should balance voluntary engagement with stronger participation requirements and improved dissemination.
- Cross-border crisis management and resolution:
  - Enhance “colleges of supervisors” with mandates and accountability for internationally active institutions.
  - Need clear, binding cross-border burden-sharing rules for failing global institutions.
  - Second-best options (new charters for internationally active banks, harmonization, enhanced coordination) should be pursued given the unlikelihood of a single global regulator soon.
- International liquidity provision:
  - Better facilities for cross-border liquidity for banks and countries are needed (contingent credit lines, regional swaps/pooling, expanded IMF mechanisms).
  - Improvements require resolving political, institutional, and operational barriers.

### VII. Conclusion and Research Gaps
- Core weaknesses exposed: treatment of systemically important institutions; systemic risk assessment; resolution frameworks.
- Policy goals remain stable output gap and low inflation, but policymakers must monitor asset price composition and leverage and use a broader toolkit (monetary plus macroprudential and fiscal automatic stabilizers).
- Reform agenda is large; political economy and industry lobbying will shape outcomes and may create implementation obstacles.
- Suggested areas for further research:
  - Competition policy for a stable financial system.
  - Consumer protection in financial services.
  - Political economy of financial regulation, financial openness, and crises.

### Key Statistics and Support Measures (selected numerical facts preserved as in source)
- U.S. house price increase: “in excess of 30 percent in the five years preceding the crisis.”
- Securitization of non-conforming mortgages: “more than 70 percent … by 2007, up from less than 35 percent in 2000.”
- U.S. share of global financial assets: “about 31 percent”; U.S. dollar share in reserve currency assets: “about 62 percent.”
- Table 1 (Support for Financial and Other Sectors and Upfront Financing Need, As of June 2009; in percent of 2008 GDP) — selected averages and totals reproduced exactly as in source:
  - Average (PPP GDP Weights)
    - G-20: 2.2 3.5 8.8 9.3 3.6
    - Advanced Economies: 3.4 5.3 14.0 6.9 5.5
    - Emerging Economies: 0.2 0.3 0.1 13.6 0.4
  - In billions of US$: 1,149 1,937 4,646 2,514 1,849
  - In billions of US$: 223 871 1,605 47
- Examples of country-specific percent-of-GDP figures preserved as presented in the table:
  - United States upfront financing need (estimated for 2009-10): US$960 bn (6.7 percent of GDP) consisting of TARP and other measures.
  - United Kingdom estimated upfront financing need: ₤289 bn (20 percent of GDP).
  - Japan budget support: JPY 3,900 bn (0.8 percent of GDP).
  - Norway: balance sheet expansion (excluding SWF) noted as “4.5 percent of GDP” in a footnote.
  - Note: Table footnotes and country cells reflect announced or pledged amounts; Column D indicates actual changes in central bank balance sheets from June 2007 to April 2009.

*Source: IMF, 2009e; FAD-MCM database on public interventions. See IMF documents, “The State of Public Finances”, for details.*

### References

### References

### IMF and Staff Notes / Reports
- International Monetary Fund, 2006-2009, Global Financial Stability Report, various issues, Washington, D.C.  
- International Monetary Fund, 2006-2009, World Economic Outlook, various issues, Washington, D.C.  
- International Monetary Fund, 2008, “Reaping the Benefits of Financial Globalization.” Occasional Paper No. 264.  
- International Monetary Fund, 2009a, “Initial Lesson of the Crisis,” SM/09/37, Washington, D.C. February 6.  
- International Monetary Fund 2009b, “Lessons of the Global Crisis for Macroeconomic Policy,” Washington, D.C., February.  
- International Monetary Fund, 2009c, “Lessons of the Financial Crisis for Future Regulation of Financial Institutions and Markets and for Liquidity Management,” Washington, D.C., February.  
- International Monetary Fund, 2009d, “Initial Lessons of the Crisis for the Global Architecture and the IMF,” Washington, D.C., February.  
- International Monetary Fund, 2009e, “The State of Public Finances: Outlook and Medium-Term Policies After the 2008 Crisis,” paper prepared by the IMF Fiscal Affairs Department, Washington, D.C., March.  
- International Monetary Fund, 2009f, “Fiscal Implications of the Global Economic and Financial Crisis”, IMF Staff Position Note SPN/09/9, Washington, D.C., June 9.  
- International Monetary Fund, 2009g, “The State of Public Finances: A Cross-Country Fiscal Monitor,” IMF Staff Position Note SPN/09/21, Washington, D.C., July 30.  
- Andritzky, Jochen John Kiff, Laura Kodres, Pamela Madrid, Andrea Maechler, Aditya Narain, Noel Sacasa, and Jodi Scarlata, 2009, “Policies to Mitigate Procyclicality,” IMF Staff Position Note SPN/09/07, Washington, D.C., March 26.  
- Carvajal, Ana, Randall Dodd, Michael Moore, Erlend Nier, Ian Tower, and Luisa Zanforlin, 2009, “The Perimeter of Financial Regulation,” IMF Staff Position Note SPN/09/07, Washington, D.C., March 26.  
- Johnston, R. Barry, Effie Psalida, Phil de Imus, Jeanne Gobat, Mangal Goswami, Christian Mulder, and Francisco Vazquez, 2009, “Addressing Information Gaps,” IMF Staff Position Note SPN/09/06, Washington, D.C., March 26.  
- Mateos y Lago, Isabelle, Rupa Duttagupta, and Rishi Goyal, 2009, “The Debate on the International Monetary System,” IMF Staff Position Note SPN/09/26, Washington, D.C., November 11.  

### Working Papers, Discussion Papers, and Databases
- Árvai, Zsófia, Karl Driessen, and Inci Ötker, 2009, “Regional Financial Interlinkages and Financial Contagion within Europe,” IMF Working Paper No. 09/6.  
- Dell’Ariccia, Giovanni, Deniz Igan, and Luc Laeven, 2008, “Credit Booms and Lending Standards: Evidence from the Subprime Mortgage Market,” IMF Working Paper No. 08/106.  
- Laeven, Luc and Fabian Valencia, 2008a, “Systemic Banking Crises: A New Database,” IMF Working Paper No. 08/224.  
- Laeven, Luc and Fabian Valencia, 2008b, “The Use of Blanket Guarantees in Banking Crises,” IMF Working Paper No. 08/250.  
- Igan, Deniz, Prachi Mishra, and Thierry Tressel, 2009, “A Fistful of Dollars: Lobbying and the Financial Crisis,” IMF Working Paper No. 09/287.  
- Schinasi, Garry J. and Pedro G. Teixeira, 2006, “The Lender of Last Resort in the European Single Financial Market,” IMF Working Paper No. 06/127.  
- Jiménez, Gabriel, Steven Ongena, José Luis Peydró-Alcalde, and Jesús Saurina, 2007, “Hazardous Times for Monetary Policy: What Do Twenty-Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk?,” CEPR Discussion Paper No. 6514.  
- Mendoza, Enrique and Marco E. Terrones, 2008, “An Anatomy of Credit Booms: Evidence from Macro Aggregates and Micro Data,” NBER Working Paper No. 14049, Cambridge, MA: National Bureau of Economic Research.  

### Academic Articles, Conference Papers, and Essays
- Brunnermeier, Markus K., 2009, “Deciphering the 2007-08 Liquidity and Credit Crunch,” Journal of Economic Perspectives Vol. 23 No. 1, pp. 77-100.  
- Brunnermeier, Markus K., Andrew Crockett, Charles A. Goodhart, Avinash Persaud, and Hyun Song Shin, 2009, The Fundamental Principles of Financial Regulation, ICMB - CEPR The Geneva Reports on the World Economy.  
- Calomiris, Charles W., 2009, “The Subprime Turmoil: What’s Old, What’s New, and What’s Next,” Journal of Structured Finance Vol. 15 No. 1, pp. 6-52.  
- Claessens, Stijn, 2009, “The Financial Crisis and Financial Nationalism,” Prepared for the Joint World Bank-CEPR Conference: Trade Implications of Policy Responses to the Crisis, Brussels, May 26-27, 2009.  
- Claessens, Stijn, Ayhan Kose, and Marco Terrones, 2009, “What Happens During Recessions, Crunches, and Busts?,” Economic Policy, Vol. 60, (October), pp. 653-700.  
- Gorton, Gary, 2008, “The Panic of 2007,” In: Maintaining Stability in a Changing Financial System, Proceedings of the 2008 Jackson Hole Conference, Federal Reserve Bank of Kansas City, 2008.  
- Gorton, Gary, 2009, “Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007,” paper prepared for the Federal Reserve Bank of Atlanta’s 2009 Financial Markets Conference: Financial Innovation and Crisis, May 11-13, 2009.  
- Reinhart, Carmen and Kenneth Rogoff, 2008, “Is the 2007 U.S. Subprime Crises So Different? An International Historical Comparison,” American Economic Review Vol. 98 No. 2, pp. 339-44.  
- Reinhart, Carmen and Kenneth Rogoff, 2009, “The Aftermath of Financial Crises,” American Economic Review Vol. 99 No. 2, pp. 466-72.  
- Ashcraft, Adam and Till Schuermann, 2008, “Understanding the Securitization of Subprime Mortgage Credit,” Federal Reserve Bank New York Staff Report No. 318, March.  
- Johnson, Simon, 2009, “The Quiet Coup,” The Atlantic, May; available at http://www.theatlantic.com/doc/200905/imf-advice.  

### Books, Edited Volumes, and Institutional Reviews
- Barth, James, Gerard Caprio, and Ross Levine, 2006, Rethinking Bank Supervision and Regulation: Until Angels Govern. Cambridge, UK: Cambridge University Press.  
- Caprio, Gerard, Douglas D. Evanoff, and George G. Kaufman, editors, 2006 “Cross-Border Banking: Regulatory Challenges,” New Jersey: World Scientific Publishing.  
- New York University Stern School of Business, 2009, Restoring Financial Stability: How to Repair a Failed System, editors Viral Acharya and Matthew Richardson, New York: John Wiley & Sons.  
- Financial Services Authority, 2009, A Regulatory Response to the Global Banking Crisis, (The Turner Review), London, March.  
- United Nations, 2009, Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System (Stiglitz Report) Conference on the World Financial and Economic Crisis and its Impact on Development, June 24-26, New York.  
- Barajas, Adolfo, Giovanni Dell’Ariccia, and Andrei Levchenko, 2009, “Credit Booms: the Good, the Bad, and the Ugly,” mimeo, IMF, Washington, D.C.  

*Source: _wp1044 - References*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1044.pdf_