{"product_id":"understanding-systemic-risk-in-global-financial-markets-isbn-9781119348504","title":"Understanding Systemic Risk in Global Financial Markets","description":"\u003cb\u003eAn accessible and detailed overview of the risks posed by financial institutions\u003c\/b\u003e \u003cp\u003e\u003ci\u003eUnderstanding Systemic Risk in Global Financial Markets\u003c\/i\u003e offers an accessible yet detailed overview of the risks to financial stability posed by financial institutions designated as systemically important. The types of firms covered are primarily systemically important banks, non-banks, and financial market utilities such as central counterparties. Written by Aron Gottesman and Michael Leibrock, experts on the topic of systemic risk, this vital resource puts the spotlight on coherency, practitioner relevance, conceptual explanations, and practical exposition. \u003c\/p\u003e\u003cp\u003eStep by step, the authors explore the specific regulations enacted before and after the credit crisis of 2007-2009 to promote financial stability. The text also examines the criteria used by financial regulators to designate firms as systemically important. The quantitative and qualitative methods to measure the ongoing risks posed by systemically important financial institutions are surveyed. \u003c\/p\u003e\u003cul\u003e \u003cli\u003eA review of the regulations that identify systemically important financial institutions\u003c\/li\u003e \u003cli\u003eThe tools to use to detect early warning indications of default\u003c\/li\u003e \u003cli\u003eA review of historical systemic events their common causes\u003c\/li\u003e \u003cli\u003eTechniques to measure interconnectedness\u003c\/li\u003e \u003cli\u003eApproaches for ranking the order the institutions which pose the greatest degree of default risk to the industry\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003e\u003ci\u003eUnderstanding Systemic Risk in Global Financial Markets\u003c\/i\u003e offers a must-have guide to the fundamentals of systemic risk and the key critical policies that work to reduce systemic risk and promoting financial stability. \u003c\/p\u003e\u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xvii\u003c\/p\u003e \u003cp\u003eAbout the Authors xviii\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Introduction to Systemic Risk 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Is Systemic Risk? 2\u003c\/p\u003e \u003cp\u003eSystemic Risk Drivers 3\u003c\/p\u003e \u003cp\u003eWhy Systemic Risk Must Be Understood, Monitored, and Managed 5\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 How We Got Here: A History of Financial Crises 9\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCommon Drivers of Historical Crises 10\u003c\/p\u003e \u003cp\u003eBursting of Asset Bubbles 10\u003c\/p\u003e \u003cp\u003eBanking Crises 14\u003c\/p\u003e \u003cp\u003eSovereign Debt Crisis 15\u003c\/p\u003e \u003cp\u003eInternational Contagion 18\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 The Credit Crisis of 2007–2009 24\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePlanting the Seeds of a Bubble: The Early 2000s 25\u003c\/p\u003e \u003cp\u003eWall Street’s Role 27\u003c\/p\u003e \u003cp\u003eThe U.S. Government Takeover of the GSEs 30\u003c\/p\u003e \u003cp\u003eThe Tipping Point: Lehman Brothers’ Failure 32\u003c\/p\u003e \u003cp\u003eAftermath of the Credit Crisis 35\u003c\/p\u003e \u003cp\u003eCost of Government Bailouts 37\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Systemic Risk, Economic and Behavioral Theories: What Can We Learn? 44\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMinsky Three-Part Model 45\u003c\/p\u003e \u003cp\u003eDebt Deflation Cycle 46\u003c\/p\u003e \u003cp\u003eBenign Neglect 47\u003c\/p\u003e \u003cp\u003eBehavioral Theories 48\u003c\/p\u003e \u003cp\u003eRisk Aversion Bias 49\u003c\/p\u003e \u003cp\u003eAsset Prices 50\u003c\/p\u003e \u003cp\u003eHomogeneous Expectations versus Heterogeneity 51\u003c\/p\u003e \u003cp\u003eAnchoring Heuristic 52\u003c\/p\u003e \u003cp\u003eExcessive Optimism 52\u003c\/p\u003e \u003cp\u003eFamiliarity Bias 53\u003c\/p\u003e \u003cp\u003eFallacy of Composition 53\u003c\/p\u003e \u003cp\u003eFight or Flight 53\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Systemic Risk Data 59\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eKey Data Attributes 60\u003c\/p\u003e \u003cp\u003eKey Policy Changes to Address Data Gaps 60\u003c\/p\u003e \u003cp\u003eData Sources 63\u003c\/p\u003e \u003cp\u003eData Collection Challenges and Remaining Gaps 63\u003c\/p\u003e \u003cp\u003eMove Toward Standardization: Legal Entity Identifier Initiative 68\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Macroprudential versus Microprudential Oversight 73\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA Comparison of Macroprudential versus Microprudential 74\u003c\/p\u003e \u003cp\u003eMicroprudential Policies 74\u003c\/p\u003e \u003cp\u003eMacroprudential Policies 76\u003c\/p\u003e \u003cp\u003eA Historical Perspective on Macroprudential Tools 77\u003c\/p\u003e \u003cp\u003eChoice of Macroprudential Policy Tools 79\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Introduction to the U.S. Regulatory Regime 84\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWho Are the Regulators? 84\u003c\/p\u003e \u003cp\u003eU.S. Regulatory Approaches 86\u003c\/p\u003e \u003cp\u003eComparison of U.S. versus International Financial Regulatory Regimes 87\u003c\/p\u003e \u003cp\u003eIntroduction to the Dodd-Frank Act 90\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Introduction to International Regulatory Regimes 97\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Financial Stability Board 97\u003c\/p\u003e \u003cp\u003eThe Basel Accords 99\u003c\/p\u003e \u003cp\u003eThe European Systemic Risk Board 99\u003c\/p\u003e \u003cp\u003ePrinciples for Financial Market Infrastructures 102\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Systemically Important Entities 107\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction to Systemically Important Entities 107\u003c\/p\u003e \u003cp\u003eClassification of Entities as Systemically Important by the FSOC 108\u003c\/p\u003e \u003cp\u003eBank SIFIs 110\u003c\/p\u003e \u003cp\u003eNonbank SIFIs 110\u003c\/p\u003e \u003cp\u003eSIFMUs 112\u003c\/p\u003e \u003cp\u003eGlobally Systemically Important Banks 112\u003c\/p\u003e \u003cp\u003eTotal Loss-Absorbing Capacity (TLAC) Requirements 114\u003c\/p\u003e \u003cp\u003eBroad Impact of Financial Stability Requirements 117\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 The Volcker Rule 120\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction to the Volcker Rule 120\u003c\/p\u003e \u003cp\u003eThe Volcker Rule: Details 122\u003c\/p\u003e \u003cp\u003eProhibition of Proprietary Trading 123\u003c\/p\u003e \u003cp\u003eProhibition of Ownership or Sponsorship of Hedge Funds and Private Equity Funds 123\u003c\/p\u003e \u003cp\u003eThe Volcker Rule and Systemically Risky Nonbank Financial Companies 123\u003c\/p\u003e \u003cp\u003eActivities That Are Permitted Despite the Volcker Rule 124\u003c\/p\u003e \u003cp\u003eImplementation of the Volcker Rule 125\u003c\/p\u003e \u003cp\u003eVolcker Rule: Criticism 126\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Counterparty Credit Risk 130\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOverview of Derivative Securities 130\u003c\/p\u003e \u003cp\u003eCounterparty Exposure 133\u003c\/p\u003e \u003cp\u003eHow Counterparty Credit Risk Is Managed 136\u003c\/p\u003e \u003cp\u003eCollateral 136\u003c\/p\u003e \u003cp\u003eNetting 136\u003c\/p\u003e \u003cp\u003eCentral Counterparties 139\u003c\/p\u003e \u003cp\u003eCounterparty Credit Risk and Systemic Risk 142\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 The Dodd-Frank Act and Counterparty Credit Risk 147\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMeasuring Counterparty Exposure in the OTC Derivatives Market 147\u003c\/p\u003e \u003cp\u003eOverview of Historical Data 149\u003c\/p\u003e \u003cp\u003eThe Evolution of the U.S. Regulatory Approach toward OTC Derivatives 152\u003c\/p\u003e \u003cp\u003eKey Provisions of Title VII of the Dodd-Frank Act 153\u003c\/p\u003e \u003cp\u003eMandatory Clearing 154\u003c\/p\u003e \u003cp\u003eExecution Platforms and Data Repositories 154\u003c\/p\u003e \u003cp\u003eRegistration Requirements 155\u003c\/p\u003e \u003cp\u003eThe Push-Out Rule 155\u003c\/p\u003e \u003cp\u003eThe End User Exemption 155\u003c\/p\u003e \u003cp\u003eCriticism of Title VII of the Dodd-Frank Act 155\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 The Basel Accords 159\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Are the Basel Accords? 159\u003c\/p\u003e \u003cp\u003eThe Approach of the Basel Accords 160\u003c\/p\u003e \u003cp\u003eBasel I 161\u003c\/p\u003e \u003cp\u003eBasel II 163\u003c\/p\u003e \u003cp\u003ePillar 1: Minimum Capital Requirements 163\u003c\/p\u003e \u003cp\u003ePillar 2: Supervisory Review 164\u003c\/p\u003e \u003cp\u003ePillar 3: Market Discipline 165\u003c\/p\u003e \u003cp\u003eBasel II. 5 165\u003c\/p\u003e \u003cp\u003eBasel III 165\u003c\/p\u003e \u003cp\u003eThe Continuing Evolution of the Basel Accords 166\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Lender of Last Resort 169\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLender of Last Resort Concept 169\u003c\/p\u003e \u003cp\u003eHenry Thornton, Walter Bagehot, and Alternative Views 170\u003c\/p\u003e \u003cp\u003eThe Fed’s Role in the Great Depression 172\u003c\/p\u003e \u003cp\u003eThe Credit Crisis of 2007–2009 173\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Interconnectedness Risk 177\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA Case Study of Interconnectedness 178\u003c\/p\u003e \u003cp\u003eInterconnectedness Categories 179\u003c\/p\u003e \u003cp\u003eThe Depository Trust \u0026amp; Clearing Corporation 180\u003c\/p\u003e \u003cp\u003ePost-Crisis Regulatory View of Interconnectedness 181\u003c\/p\u003e \u003cp\u003eBasel Committee on Banking Supervision 181\u003c\/p\u003e \u003cp\u003eOffice of Financial Research 182\u003c\/p\u003e \u003cp\u003eCPMI IOSCO Principles 184\u003c\/p\u003e \u003cp\u003eAn Approach to Analyzing Interconnectedness Risk 185\u003c\/p\u003e \u003cp\u003eThe Depository Trust \u0026amp; Clearing Corporation 185\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 Conclusion: Looking Ahead 190\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIt’s Not a Question of If, but When, Where, and How 192\u003c\/p\u003e \u003cp\u003eA Summary of Global Surveys 192\u003c\/p\u003e \u003cp\u003eSources of Systemic Risk 193\u003c\/p\u003e \u003cp\u003ePreparing for the Next Crisis 194\u003c\/p\u003e \u003cp\u003eAppendix: Systemic Risk Models 198\u003c\/p\u003e \u003cp\u003eStructural versus Reduced-Form Credit Models 198\u003c\/p\u003e \u003cp\u003eContingent Claims and Default Models 199\u003c\/p\u003e \u003cp\u003eMerton versus Garch 204\u003c\/p\u003e \u003cp\u003eStudies in Support of Merton 205\u003c\/p\u003e \u003cp\u003eMacroeconomic Measures 210\u003c\/p\u003e \u003cp\u003eProbability Distribution Measures 211\u003c\/p\u003e \u003cp\u003eIlliquidity Measures 214\u003c\/p\u003e \u003cp\u003eCounterparty Risk Measures 215\u003c\/p\u003e \u003cp\u003eBehavioral Models 217\u003c\/p\u003e \u003cp\u003eSolutions to the Knowledge Check Questions 223\u003c\/p\u003e \u003cp\u003eIndex 239\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eARON GOTTESMAN\u003c\/b\u003e is Professor of Finance and the chair of the Department of Finance and Economics at the Lubin School of Business at Pace University. He is widely published in academic journals and is the author of \u003ci\u003eDerivatives Essentials: An Introduction to Forwards, Futures, Options, and Swaps\u003c\/i\u003e. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eMICHAEL LEIBROCK\u003c\/b\u003e is managing director, chief systemic risk officer, and head of Counterparty Credit Risk for The Depository Trust \u0026amp; Clearing Corporation (DTCC). He serves as chair of DTCC’s Model Risk Governance Committee and co-chair of the Systemic Risk Council, and is an active speaker globally on the topics of systemic and credit risk.    \u003c\/p\u003e\u003cp\u003eSystemic risk is the risk that developments in the financial system will disrupt financial stability and the economy. While systemic risk has been a central concern since the Credit Crisis of 2007–2009, the history of finance shows that financial crises occur frequently and threats to financial stability are constant, requiring careful monitoring and management of systemic risk. \u003ci\u003eUnderstanding Systemic Risk in Global Financial Markets\u003c\/i\u003e is your in-depth primer on the core principles and dynamics of systemic risk that comes complete with a real-world approach to managing it. \u003c\/p\u003e\u003cp\u003eIn a brilliant presentation specifically designed for accelerated learning, two thought leaders from academia and business take you on an enlightening exploration of the prime drivers of systemic events—through such historic happenings as the Dutch Tulip Crisis, South Street Sea Bubble, the Great Depression, and the Credit Crisis of 2007–2009 — to offer an advantageous perspective on how these drivers influence banks and other financial institutions designated as systemically important. Without presuming any advanced background in mathematics, straightforward explanations illuminate theories in both economics and human behavior that contribute to financial crises in an attempt to understand the impact of potential events in the future. Through the unique lens this guidebook offers, you can clearly see the interconnectedness financial firms have with each other and the rest of the world, while gaining: \u003c\/p\u003e\u003cul\u003e\n\u003cli\u003e A practical understanding of how to monitor and analyze real-world conditions to mitigate impact from a systemic crisis\u003c\/li\u003e\n\u003cli\u003e A firm grasp of U.S. financial regulation, including the Dodd-Frank Act, as well as key international regulators and standards such as the Financial Stability Board and the Basel Accords\u003c\/li\u003e\n\u003cli\u003e Cutting-edge insight into the latest ways data is now used to effectively monitor systemic financial risks \u003c\/li\u003e\n\u003c\/ul\u003e \u003cp\u003e\u003ci\u003eUnderstanding Systemic Risk in Global Financial Markets\u003c\/i\u003e gives you the perspective and hands-on skillset to effectively monitor and respond to events that can threaten financial stability.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990433644773,"sku":"NP9781119348504","price":75.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119348504.jpg?v=1761787810","url":"https:\/\/k12savings.com\/products\/understanding-systemic-risk-in-global-financial-markets-isbn-9781119348504","provider":"K12savings","version":"1.0","type":"link"}