Banking system stability measures - a new model
A paper from the International Monetary Fund, co-authored by Charles Goodhart, a former member of the Bank of England's Monetary Policy Committee, presents a new method for estimating the impact of stability measures on the banking system.
The method conceptualises the banking system as a portfolio of banks compromising the core, systemically important, banks in any country. The new framework captures both linear and non-linear default dependencies among the main banks and can be applied to both
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