Narrow Your Choices

Refine By Type

Refine By Countries

Refine By Topic

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Browse

You are looking at 1 - 1 of 1 items for :

  • Financial services industry; Law and legislation x
  • Saving and investment x
  • National accounts x
  • Financial Crises x
  • Macroeconomics x
  • Mathematics and Science x
  • Financial regulation and supervision x
  • General Financial Markets: General (includes Measurement and Data) x
  • United States x
  • Economic History x
  • Asia and Pacific x
Clear All
Cover IMF Working Papers
Regulatory Cycles: Revisiting the Political Economy of Financial Crises
Jihad Dagher
Financial crises are traditionally analyzed as purely economic phenomena. The political economy of financial booms and busts remains both under-emphasized and limited to isolated episodes. This paper examines the political economy of financial policy during ten of the most infamous financial booms and busts since the 18th century, and presents consistent evidence of pro-cyclical regulatory policies by governments. Financial booms, and risk-taking during these episodes, were often amplified by political regulatory stimuli, credit subsidies, and an increasing light-touch approach to financial supervision. The regulatory backlash that ensues from financial crises can only be understood in the context of the deep political ramifications of these crises. Post-crisis regulations do not always survive the following boom. The interplay between politics and financial policy over these cycles deserves further attention. History suggests that politics can be the undoing of macro-prudential regulations.
Keywords:
WP; central bank; financial market; political economy; banking sector; Financial Regulation; Financial Crises; Boom-Bust Cycles; Glass-Steagall Act; financial bubble; ruling party; share price; joint stock; crony capitalism; plain vanilla; stock index; bubble company; joint-stock bank; incumbent governments policy; government sponsorship; Housing; Global financial crisis of 2008-2009; Banking crises; Global; South America