Systemic instability of the banking sector

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Answer the following questions with the heading: "Systemic Instability of the Banking Sector: Causes and Cures"

Why banking crises force banks to deleverage, why deleveraging negatively affects the real economy and how the authorities can try to limit the damage to the real economy.

The difference between micro- and macroprudential regulation.

Discuss the various types of macro-prudential regulation as suggested by the Basel III framework.

Explain the limited extent to which increased liquidity and capital requirements can prevent banking instability.

Reference no: EM133223204

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