Financial crises have been associated with severely damaged banking systems. Restoring economies to full health requires ensuring the banking system is operating effectively. There are two, sometimes conflicting, objectives. Firstly, the banks need to be repaired to avoid a severe credit crunch—this is the main focus of this paper. Secondly, the banking environment needs to be improved so that the problems do not recur. Reassuring current depositors and encouraging new lending by banks without reducing incentives for future creditors and shareholders to take due care (that is, avoiding moral hazard) is always a challenging task.
|Title of host publication||Global Financial Crises|
|Subtitle of host publication||Lessons From Recent Events|
|Editors||Joseph Bisignano, William Hunter, George Kaufman|
|Place of Publication||Dodrecht|
|Publisher||Kluwer Academic Publishers|
|Number of pages||21|
|Publication status||Published - Jun 2000|