article thumbnail

Accounting for Bank Failure

Harvard Corporate Governance

Could better accounting rules have saved Silicon Valley Bank (SVB)? On the other hand, greater accounting transparency can unnecessarily cause bank depositors to panic at the first sign of trouble, threatening the stability of the banking system. The answer is a resounding maybe.

Banking 248
article thumbnail

The Credit Suisse Collapse and the Regulation of Banking

Harvard Corporate Governance

Credit Suisse, one of the world’s largest 30 banks with assets exceeding $500 billion, melted down earlier this month. How this collapse quickly unfolded raises serious questions about the regulatory actions preceding it and the future of banking regulation. ” SNB also pledged to provide CS with liquidity if necessary.

Banking 279
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Trending Sources

article thumbnail

Banking Crises in Historical Perspective

Harvard Corporate Governance

The survey paper is organized around three main lessons learned about banking crises: the importance of leverage as a precursor to crises, the large and negative real impact of crises on various sectors of the economy, and that government and central bank intervention has historically ameliorated these effects. more…)

Banking 247
article thumbnail

Know Your Customer: Informed Trading by Banks

Harvard Corporate Governance

Since the implementation of the Glass-Steagall Banking Act of 1933 concerns about combined banking operations, i.e., commercial and investment banking within the same universal bank, faded. This study aims to demystify information transmission within universal banking systems.

Banking 235
article thumbnail

Governance of Sustainability in the Largest Global Banks

Harvard Corporate Governance

Introduction Banks are at the heart of every major national economy — and of the global economy as a whole. We also interviewed representatives from fifteen leading banks – twelve of which were part of this study and eight of which were globally systemic banks (“G-SIBs”). Strine, Jr.;

Banking 264
article thumbnail

The March 2023 Bank Interventions in Long-Run Context – Silicon Valley Bank and Beyond

Harvard Corporate Governance

In March 2023, the failure of Silicon Valley Bank (SVB) shocked global financial markets. In many ways, the SVB failure was a classic bank run, with details that appear drawn from the 19 th century rather than the 21 st. This post is based on their recent paper.

Banking 211
article thumbnail

Deregulation and Board Policies: Evidence from Performance Measures Used in Bank CEO Turnover Decisions

Harvard Corporate Governance

The banking industry has undergone substantial changes since the late 1970s, largely due to deregulation and rapid market developments. Over that period, banks’ growth opportunities expanded, and banks entered new markets, both geographic and product. Cunat and Guadalupe 2009; DeYoung et al.

Banking 202