Interaction of market and credit risk framework and literature review
A disruptive technology or disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect. Although the term disruptive technology is widely used, disruptive innovation seems a more appropriate term in many contexts since few technologies are intrinsically disruptive; rather, it is the business model that the technology enables that creates the disruptive impact. How can I beat my most powerful competitor? Why has disruption proven to be such a consistently effective strategy for causing strong incumbent competitors to flee from their entrant attackers, rather than fight them? How can I shape a business idea into a disruptive strategy?
Network models of financial systemic risk: a review
Network models of financial systemic risk: a review | SpringerLink
Francesca Carapella and Jean Flemming. Technological advances in recent years have led to a growing number of fast, electronic means of payment available to consumers for everyday transactions, raising questions for policymakers about the role of the public sector in providing a digital payment instrument for the modern economy. From a theoretical standpoint, the introduction of a central bank digital currency CBDC raises long-standing questions relating to the provision of public and private money Gurley and Shaw , and the ability of the central bank to use CBDC as a means for transmitting monetary policy directly to households Tobin The theoretical literature on CBDC to date relates to these questions by focusing on the effect of introducing a CBDC i on commercial banks, and ii on monetary policy and financial stability, and the resulting welfare implications. Policymakers have also taken a keen interest in these questions, among others Bank for International Settlements Broadly, the literature that studies CBDC considers it to be a means of payment that can pay interest and that does not necessarily need to be held in an account at a commercial bank. Though there is no universally agreed-upon definition of CBDC by policymakers or academics, thus far the literature has studied the implications of a central bank liability held directly by the public 1.
Findings on the interaction of market and credit risk
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The BIS hosts nine international organisations engaged in standard setting and the pursuit of financial stability through the Basel Process. ECL standards require banks to recognise credit losses projected to crystallise in the future and credit losses already incurred. Recognition of such future losses, however, was generally not permitted under IL standards, which placed significant constraints on this practice. Many contend that the constraints under IL accounting led to a possible 'too little, too late' problem that reinforced the inherent procyclicality of the banking sector and amplified the depth and duration of the —09 financial crisis. The purpose of this literature review is to shed light on the role that credit loss accounting standards play in affecting procyclicality as viewed from the lens of a prudential policymaker.