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Bank Size and Systemic Risk
Author:
Mr. Luc Laeven
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,
Mr. Lev Ratnovski
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Mr. Hui Tong
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Series:
Staff Discussion Notes
Volume/Issue:
Volume 2014: Issue 004
Language:
English
Publication Date:
08 May 2014
DOI:
https://doi.org/10.5089/9781484363720.006
ISBN:
9781484363720
ISSN:
2617-6750
Pages:
34
Keywords:
SDN; large bank; bank risk; bank size; bank activity; bank characteristic; Financial Structure; Financial Regulation; Systemic risk; Personal income; Stocks; Commercial banks; Global; Europe
Legal-disclaimer:
Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate.The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
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The proposed SDN documents the evolution of bank size and activities over the past 20 years. It discusses whether this evolution can be explained by economies of scale or “too big to fail” subsidies. The paper then presents evidence on the extent to which bank size and market-based activities contribute to systemic risk. The paper concludes with policy messages in the area of capital regulation and activity restrictions to reduce the systemic risk posed by large banks. The analysis of the paper complements earlier Fund work, including SDN 13/04 and the recent GFSR chapter on “too big to fail” subsidies, and its policy message is in line with this earlier work.
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Cover Staff Discussion Notes
Staff Discussion Notes
ISSN:
2617-6750
Publisher:
International Monetary Fund