Publications
BackThe serious financial and economic crisis has shown that the current regulatory system that makes strongly modelbased assumptions, which in turn are based on historic data, in connection with the valuation rules of true and fair value accounting, may result in undesired procyclic effects, apart from not having been able to prevent the crisis. Other significant contributors to the development of the systemic risk are also those elements of the financial system, which are not or only insufficiently covered by the regulation.
To some extent, this was carried out via a shadow bank system by off-balance transactions and special investment vehicles, significant numbers of which are located in non-cooperative or insufficiently cooperative jurisdictions with inadequate regulatory standards. This resulted in an excessively high leverage, which could only be maintained as long as the illusion of alwaysavailable liquidity could be upheld. After the outbreak of the crisis, only massive interventions of central banks and governments, which used vast amounts of tax money, were able to prevent the situation from worsening.
