Taking Prudence Seriously

Philosophers have long theorized about which things make people’s lives go well, and why, and the extent to which morality and self-interest can be reconciled. Yet little time has been spent on meta-prudential questions, questions about prudential discourse. This is surprising given that prudence is, prima facie, a normative form of discourse and, as such, cries out for further investigation. Chapter 4 takes up two major meta-prudential questions. It first examines whether there is a set of prudential reasons, generated by evaluative prudential properties, and defends the view that evaluative well-being facts generate agent-relative reasons for the relevant agent. It also investigates whether prudential discourse is normative. It is proposed that prudential discourse is normative by arguing that prudential judgements are normative judgements. The case for this is presented by analogy with moral discourse by showing that the features of moral judgements that metaethicists appeal to when articulating, explaining, and justifying the claim that moral judgements are normative are also possessed by prudential judgements. Various objections to the analogy are also considered

Catch the Spirit: A Student\u27s Guide to Community Service

Ideas and information on how young people can help make their communities better places to live

Financial Stability, New Macro Prudential Arrangements and Shadow Banking: Regulatory Arbitrage and Stringent Basel I I I Regulations

Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules? As well as Basel III reforms which are geared towards greater facilitation of financial stability on a macro prudential basis, further efforts and initiatives aimed at mitigating systemic risks – hence fostering financial stability, have been promulgated through the establishment of the De Larosiere Group, the European Systemic Risk Board, and a working group comprising of “international standard setters and authorities responsible for the translation of G20 commitments into standards.” This paper aims to investigate the impact of Basel III on shadow banking and its facilitation of regulatory arbitrage as well as consider the response of various jurisdictions and standard setting bodies to aims and initiatives aimed at improving their macro prudential frameworks. Furthermore, it will also aim to illustrate why immense work is still required at European level – as regards efforts to address systemic risks on a macro prudential basis. This being the case even though significant efforts and steps have been taken to address the macro prudential framework. In so doing, the paper will also attempt to address how coordination within the macro prudential framework – as well as between micro and macro prudential supervision could be enhanced

Tradition and Prudence in Locke's Exceptions to Toleration

Why did Locke exclude Catholics and atheists from toleration? Not, I contend, because he was trapped by his context, but because his prudential approach and practica ljudgments led him to traditiona ltexts. I make this argumentfirst by outlining the connections among prudential exceptionality, practical judgments, and traditional texts. I then describe important continuities betweenc onventional English understandings of the relationship between state and religion and Locke's writings on toleration, discuss Locke's conception of rights, and illustrate his use of prudential exceptions and distinctions. I conclude by arguing that Locke's problems are relevant to assessingc ontemporary liberal discussions of tolerationa nd the separation of state and religion that lean heavily on practical justification

Prudential Policy

This paper studies the rationale behind prudential policies in the banking sector. The main components of these prudential policies are deposit insurance, solvency regulations, and emergency liquidity assistance by the central bank, acting as a lender of last resort. We discuss the institutional arrangements that are necessary to limit the frequency and extent of individual bank failures as well as those of systemic banking crises.

Financial stability, new macro prudential arrangements and shadow banking: regulatory arbitrage and stringent Basel III regulations

Despite Basel III’s efforts to address capital and liquidity requirements, will the risks linked to regulatory arbitrage increase as a result of Basel III’s more stringent capital and liquidity rules? As well as Basel III reforms which are geared towards greater facilitation of financial stability on a macro prudential basis, further efforts and initiatives aimed at mitigating systemic risks – hence fostering financial stability, have been promulgated through the establishment of the De Larosiere Group, the European Systemic Risk Board, and a working group comprising of “international standard setters and authorities responsible for the translation of G20 commitments into standards.” This paper aims to investigate the impact of Basel III on shadow banking and its facilitation of regulatory arbitrage as well as consider the response of various jurisdictions and standard setting bodies to aims and initiatives aimed at improving their macro prudential frameworks. Furthermore, it will also aim to illustrate why immense work is still required at European level – as regards efforts to address systemic risks on a macro prudential basis. This being the case even though significant efforts and steps have been taken to address the macro prudential framework. In so doing, the paper will also attempt to address how coordination within the macro prudential framework – as well as between micro and macro prudential supervision could be enhanced.counter party risks; liquidity; European Systemic Risk Board; stability; systemic risk; Shadow Banking; central banks; regulatory arbitrage; OTC derivatives; European Central Bank; supervision; coordination

Eliminating Prudential Reasons

I argue, contrary to the consensus of most contemporary work in ethics, that there are no (fundamentally, distinctively) prudential reasons for action. That is to say: there is no class of reasons for action that is distinctively and fundamentally about the promotion of the agent’s own well-being. Considerations to do with the agent’s well-being can supply the agent with reasons only in virtue of her well-being mattering morally or in virtue of her caring about her own well-being. In both of these cases, the way that such prudential considerations supply reasons for action is a way that the well-being of others can supply reasons for action too

Institutional structures of financial sector supervision, their drivers and emerging benchmark models

This paper studies the development of institutional structures for prudential and business conduct supervision of financial services over the past decade for 98 high and middle income countries. It identifies possible drivers of changes in these supervisory structures using a panel ordered probit analysis. The results show that (i) countries advancing to a higher stage of economic development tend to integrate their financial sector supervisory structure. Similarly, improvements in overall public governance drive countries to adopting more integrated supervisory arrangements. (ii) Greater independence of the central bank could entail less integration of prudential supervision, but not necessarily of business conduct. (iii) Small open economies opt for more integrated structures of financial sector supervision, especially on the prudential side. (iv) Financial deepening makes countries integrate supervision progressively more, however, greater development of the non-bank financial system including capital markets and the insurance industry makes countries opt for less integrated prudential supervision but not business conduct supervision structures. (v) The lobbying power of concentrated and highly profitable banking sectors acts as a significant negative force against business conduct integration. (vi) Countries with banking sectors that have been more exposed to aggregate liquidity risk, due to their high share of external funding, tend to integrate more their prudential supervision. Finally, (vii) a country that has experienced past financial crises is more likely to integrate its supervisory structure for financial services.Integrated Supervision, Prudential and Business Conduct Supervision, Financial Services, International Experience, Panel Data Analysis, Ordered Probit

Financial Crises and Macro-Prudential Policies

Stochastic general equilibrium models of small open economies with occasionally binding financial frictions are capable of mimicking both the business cycles and the crisis events associated with the sudden stop in access to credit markets (Mendoza, 2010). This paper studies the inefficiencies associated with borrowing decisions in a two-sector small open production economy, finding that this economy is much more likely to display under-borrowing rather than over-borrowing in normal times. As a result, macro-prudential policies (e.g, Tobin taxes or economy-wide controls on capital inflows) are costly in welfare terms. Moreover, macro-prudential policies aimed at minimizing the probability of the crisis event might be welfare-reducing in production economies. The analysis shows that there is a much larger scope for welfare gains from policy interventions during financial crises. That is to say that, ex post or crisis-management policies dominate ex ante or macro-prudential ones.Capital controls, Crises, Financial frictions, Macro-prudential policies, Bailouts, Overborrowing

Successfully Implementing Major Financial Stability Regulatory Reforms: The Risk Weighting Based Controversy (Basel v Dodd Frank) and the Role of National Supervisors.

As well as a consideration of the role contributed by national supervisors in the successful implementation and enforcement of standards, recommendations and regulations, the significance of clear and unambiguous mandates in enhancing communication between micro prudential supervisors (usually national financial supervisors and central banks) and macro prudential bodies which are responsible for writing the laws that are enforced by micro prudential supervisors, will be highlighted in this paper. This will incorporate a discussion on the advantages and disadvantages inherent in clear, explicit mandates – such a discussion necessitating a distinction between financial stability and monetary policy objectives. Furthermore, the role of credit ratings and their significance in influencing investor choices and judgments, will be considered as a means of highlighting how they contribute to the neglect of risks, exposures attributed to certain financial instruments, and ultimately, systemic risks which de stabilize the financial system