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Published in:
2000 | OriginalPaper | Chapter
Systemic Risk, Bank Supervision and Follow-the-Sun Overdraft
Author : Dimitris N. Chorafas
Published in: New Regulation of the Financial Industry
Publisher: Palgrave Macmillan UK
Included in: Professional Book Archive
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What makes regulators nervous with systemic risk is the likelihood that failure in one big financial institution, or a segment of the economy, may trigger failure in other banks or industrial sectors. When such failures snowball through the global financial market, there is a domino effect. In September 1998, a LTCM-type bankruptcy would have led to such an avalanche world-wide.